Friday, 1 April 2011

SPI/ASX200 Morning thoughts

The SPI is indicated to open at 4867 this morning which is around yesterday's closing highs. I think today is likely to be a consolidation type day with the possibility of some weakness/"profit taking" should 4845 break to the downside. Note it is a non-farms Friday and thus activity may be subdued.

I must stress once again that the trend is up on all time frames and we must continue to buy breakouts above resistance. Thus if we break 4870/75 on good volume, look for a move up to 4900.

Scenarios I am following today:
i) Look to buy support at 4835. Use tight stops and if this level breaks, get short targeting 4800. This target may need a few days to play out
ii) If we continue to consolidate between 4840 to 4870, look to buy a breakout of this range later in the afternoon targeting 4900

I always keep the ASX200 cash chart on my screens. Key resistance levels today are 4847/4850 which is the 78.6 retrace level and a previous major high. 4864 was the high prior to the major sell off

Good luck. I will update throughout the day