Market Participants on Shopping Spree, Stocks Under Chartist’s Lens – NWS, BRG, MSB, SXL

  • Aug 12, 2020 AEST
  • Team Kalkine
Market Participants on Shopping Spree, Stocks Under Chartist’s Lens – NWS, BRG, MSB, SXL

Summary

  • S&P/ASX 200 is now sustaining well above the 6,000 mark, building strong hope among market participants that the recent tide is bound for 8,000 mark.
  • Furthermore, the Australian share market is witnessing some high inflow from global ETFs, leading to a surge in volume on the exchange and reflecting on high public participation.
  • The YTD money flow from Vanguard Australian Shares Index ETF (VAS) jumped to reach $1,434.8 million (as on 7 August 2020), leading the total 12-month flows to $2,031.4 million (as on 7 August 2020).
  • The support and emerging interest of the public in the equity market is now once again pulling the string for many listed stocks with some giving interesting signals on charts.
  • News Corporation, Breville Group, Mesoblast, and Southern Group on charts.

The equity market seems to be on a shopping spree with the major equity index- the S&P/ASX 200 index crossing and sustaining the 6,000 mark.

Moreover, the Australian share market is witnessing some high inflow from global ETFs, leading to a surge in volume on the exchange and reflecting on high public participation.

To Know More, Do Read: S&P/ASX 200 - A Rising Tide Bound For 8,000 Mark?

The high interest from some  Australian shares index ETFs could be witnessed by looking at the large fund inflow, for example, the YTD money flow from Vanguard Australian Shares Index ETF (VAS) jumped to reach $1,434.8 million (as on 7 August 2020), leading the total 12-month flows to $2,031.4 million (as on 7 August 2020).

The support and emerging interest of the public in the equity market is now once again pulling the string for many listed stocks with some giving interesting signals on charts.

ASX-listed Stocks Under Momentum

News Corporation (ASX:NWS)

NWS Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

NWS Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

  • On following the daily chart, it could be seen that the stock is trading above the pair of 200- and 50-day exponential moving average, reflecting that the intermediate trend is now an uptrend.
  • In the recent trading sessions, NWS attempted a volatility breakout with the price crossing the +2 Standard Deviation (or SD) of the 20-day simple Bollinger band and managed to sustain the volatility break post witnessing a volatility squeeze (as reflected by the narrowing Bollinger band), reflecting bullish sentiments and public participation.
  • Furthermore, the recent volatility breakout is well supported by volumes, as confirmed by the upward sloping On Balance Volume (or OBV), which is further confirming the public participation in the rally.
  • However, the 14-day Relative Strength Index has now reached the overbought zone, and in the immediate near-term, the +2 SD would shift to the recent high posing immediate resistance, suggesting that the stock might take a minute correction before picking up the momentum again.

Breville Group Limited (ASX:BRG)

BRG  Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

BRG  Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

On following the daily chart, it could be seen that the stock is trading in an uptrend for quite some time now with the price trading above the pair of 200- and 50-day exponential moving average. In the recent trading sessions, BRG attempted a volatility breakout with the stock breaching the +2 SD of the 20-day simple Bollinger band.

  • However, the stock is currently struggling to sustain the volatility breakout with prices testing the +2 SD.
  • The volatility breakout in the stock is well supported by large participation, inferred from the rising OBV reading. The OBV is moving in tandem with the price, reflecting that the prevailing sentiment around the stock is bullish in nature with good volumes.
  • However, the 14-day RSI has now reached the overbought zone which coupled with a struggle to sustain the volatility breakout is reflecting that a correction from profit-booking might take place prior to any major move.

Mesoblast Limited (ASX:MSB)

MSB  Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

MSB  Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

On following the daily chart, it could be seen that the stock just slipped below its support zone after a steep rise which ended in the volatility breakout.

  • At present, the stock is revising its mean value of the 20-day simple Bollinger band, which should be considered as decisive and near-term support for the stock, as it is overlapping with the 50-day exponential moving average.
  • Moreover, the major support for the stock is now at the -2 SD of the 20-day simple Bollinger band, which is overlapping with the 200-day EMA.
  • However, it should be noticed that the sudden correction in the stock is not followed by a large decline in the OBV, which could reflect on the possibility that the recent correction was mainly led by profit booking activity rather than change in bullish sentiments.
  • On the resistance counter, the extended upper trendline should act as immediate resistance followed by a decisive resistance of +2 SD.

Southern Cross Media Group Limited (ASX:SXL)

SXL Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

SXL Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

On following the daily chart, it could be seen that the stock is currently showing an intermediate downtrend with prices trading below the 200-day EMA and also below the 50-day EMA.

  • However, it should be noticed that after a steep decline, the stock demonstrated an upside momentum for a while before entering a phase of consolidation on the daily timeframe.
  • The consolidation phase is now showing a volatility squeeze with the upper and lower standard deviation of the 20-day simple moving average falling, which coupled with a slight up slope in OBV is reflecting on the probability that bears might be losing steam with no further participation from the bearish side.
  • Moreover, a slight increase in OBV and 14-day RSI, which is now at the oversold zone, in the consolidation is reflecting on slight bullish participation on the stock.
  • The major support for the stock is at the -2 SD of the 20-day simple Bollinger band while immediate resistance for the stock is at +2 SD followed by a 200-day EMA.

 

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