ASX 200 Outlook for Week Ahead: Sideways, Down, or Up?

By ,

At time of writing the ASX 200 [XJO] is up marginally by .37%, sitting at just under 6,000 points, or 5,963.4.

This follows a sharp fall for the XJO, as markets opened it plunged and went as low as 5,881.

Three XJO charts for you…

There is a potential point of resistance at 6,000, dating back to 2015, marked out below:

ASX XJO - ASX 200 Shares

Source: tradingview.com

And you can see, there is an uptrend in its 20- and 50-day moving averages below on the weekly:

ASX XJO Share Price Chart - ASX 200 Shares

Source: tradingview.com

On the daily chart you can see it almost pushed past 6,200, registering the highest point of the coronavirus rally, 6,198.6.

Since then it has posted a small day in the green, then a three-day losing streak, a subsequent large green bar, and now some sideways trading:

ASX XJO Share Price Chart 3

Source: tradingview.com

Without getting too bogged down in charts though, there are some intriguing points to consider going forward for the XJO.

For instance, a lot of the enthusiasm around the travel sector appears to be evaporating in the face of a continued risk of lengthy border closures.

This includes companies like Qantas Airways Ltd [ASX:QAN], Flight Centre Travel Group Ltd [ASX:FLT], and Webjet Ltd [ASX:WEB].

All are down around 3–4% today, at time of writing.

Another risk to consider is how the big banks are going to deal with rising unemployment figures and bad debt.

With the XJO’s heavy weighting towards financials, this could be a concern.

A passive strategy might not be the best way forward, if say you think the Big Four are due for more pain.

Outlook for ASX

The US-China trade war could ramp up, there could be a second wave of the virus, and after a strong rally from the March low, investors may look to take some money off the table.

All are downside risks in the current environment.

That being said, after four small bars on the daily, it is possible this week may finish largely flat.

Weekly consumer sentiment data is due out on Tuesday, which may move retail and e-commerce stocks.

Followed by that, you have ABS job vacancy data to be released on Thursday, 25 June.

There will also be a flurry of US data throughout the week including GDP data for the March quarter to be released on Thursday.

This could swing the XJO in Friday’s session depending on which way it goes.

Regards,

 

Lachlann Tierney,
For Money Morning

PS: ‘The Coronavirus Portfolio’: The two-pronged plan to designed to help you deal with the financial implications of COVID-19. Download your free report here now.

About Lachlann Tierney

Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest…

Is There Still Life in Small-Caps? — Some Exciting News

The chart tells you that small-caps aren’t dead. After the Morrison government effectively shouldered all the risk for loan guarantees, or at least 80% of it, there will be some ASX-listed small-cap beneficiaries…

What Next for Altium Share Price? (ASX:ALU)

We examine Altium Ltd’s [ASX:ALU] share price outlook after recent ASX tech sell-off. The last few months have not been kind to Altium and its share price. The ALU share price is down 22% …

Webjet Share Price Up on Government Support Package (ASX:WEB)

The Webjet Ltd [ASX:WEB] share price rose on news the government will support the domestic travel sector. The share price of Webjet Ltd [ASX:WEB] shares are down slightly by less than .7%, trading at $6.04…

ASX Weekly Market Outlook and the Top Movers Last Week

The All Ordinaries [ASX:XAO] experienced a strong week last week, gaining 261 points. The move up took place on slightly decreased trading volumes, but nothing to be concerned about…

Earnings Calendar and Why the ASX Is Lagging the US Stock Market

We should see some big moves in individual stocks on the ASX this week. Whether the ASX 200 moves up or down is yet to be seen. A lot of earnings are due and some will surely disappoint…

Thinking of an ASX 200 ETF? Where to Look for Opportunities

You may be thinking of buying an ASX 200 ETF that tracks the overall performance of [XJO] which is the ticker symbol for the index. So let’s take a look at what the ASX is up to, and where the best investment opportunities could be in the context of recent market moves….