ASX ChartWatch: Tech Giants and Mid-Caps Slide as Downtrends Dominate

Highlights

• ChartWatch scans show a heavy skew towards ASX downtrends

• Only a couple of names appear in the uptrends list

• High-profile stocks like Xero, Wesfarmers and Technology One feature in the downtrends

ChartWatch scans show a heavy skew toward ASX downtrends, with only a couple of stocks in uptrends and many big names like Xero, Wesfarmers and Technology One now displaying sustained technical weakness.

The latest ChartWatch ASX Scans paint a challenging picture for local equities. While the S&P/ASX 200 recently reached a record high, the follow-through has been weak, with selling pressure now clearly reflected in the trend scans.

In the most recent update, the number of stocks appearing in the Downtrends Scan List has significantly outweighed those in the Uptrends List. According to the commentary, this shift has been building for several weeks, signalling a change in market tone shortly after the index peak.

The scan methodology focuses purely on price behaviour and trend structure, aiming to identify where the market is showing sustained strength or weakness, rather than reacting to single-session moves.

Which Stocks Are Holding Their Uptrends?

Despite the broader weakness, a few names continue to stand out in the Uptrends Scan List. The latest scan highlights:

• iShares Global Healthcare ETF (IXJ)

• Starpharma Holdings (ASX:SPL)

These are currently the only stocks appearing in the Uptrends list, and notably, no “Feature Charts” have been selected from this group, underscoring how limited the pool of strong uptrends is right now.

For traders and chart-watchers, this signals a market phase where genuine momentum to the upside is scarce, and caution around chasing strength may be higher than usual.

Which ASX Leaders Are Now in Downtrends?

The Downtrends Scan List is crowded, spanning financials, technology, consumer, healthcare, industrials and more. Among the most recognisable names now flagged as being in established downtrends are:

• Wesfarmers (ASX:WES)

• Goodman Group (ASX:GMG)

• Technology One (ASX:TNE)

• Pro Medicus (ASX:PME)

• Xero (ASX:XRO)

• Zip Co. (ASX:ZIP)

• REA Group (ASX:REA)

• Seek (ASX:SEK)

• Audinate Group (ASX:AD8)

• JB Hi-Fi (ASX:JBH)

• Netwealth Group (ASX:NWL)

• Nextdc (ASX:NXT)

• Perpetual (ASX:PPT)

• WA1 Resources (ASX:WA1)

These stocks appear in the “Feature Charts” section of the downtrends list, indicating that the analyst sees particularly strong signs of excess supply and sustained selling pressure in their price action.

What Does the Trend Imbalance Say About the ASX?

One of the key observations in the commentary is the timing of this shift. The number of downtrending stocks has been outpacing uptrending names since late October, not long after the ASX 200 posted its all-time high.

From a trend-following perspective, this is used as evidence that the market often starts signalling internal weakness well before it becomes obvious in headline indices. When more stocks are trending lower than higher, it can indicate that breadth is thinning, even as the index may still appear elevated.

The current scan results suggest:

• A broad-based loss of upward momentum across many sectors

• A concentration of weakness in previously strong growth, tech and quality names

• A market phase where downside trends are more common than sustained rallies

How Are Traders Encouraged to Use the Scan Lists?

The ChartWatch series is framed as educational, designed to help traders and investors understand how trend-following models interpret market action. The scan lists can be used in various ways, including:

• Monitoring stocks in strong uptrends for potential momentum opportunities

• Tracking stocks in downtrends to understand where sustained selling is occurring

• Building watchlists to observe how trends evolve over time

The article explicitly notes that the lists are not recommendations, and there is no ongoing alert when a stock drops off a list. Users are encouraged to apply their own research and technical criteria to confirm trends and reassess positions as conditions change.

Why Does Trend Following Matter in This Context?

The core message of the ChartWatch commentary is that trend-following is about listening to the market, rather than trying to predict turning points. When a large number of stocks move into downtrends shortly after a major index high, it can be seen as an early warning that underlying conditions are changing.

Key takeaways on trend following from this scan:

• Trends can provide early clues about market health

• A growing imbalance between uptrends and downtrends can signal shifts in risk appetite

• Price action often turns well before the narrative, making objective technical tools valuable for monitoring conditions