Market Snapshot - Sep/Oct 2011

Lachlan McPherson provides up-to-date market analysis: Short-term pain versus long-term gain – the best of both worlds.

The past two months have been a joyous time for anyone taking advantage of short-term volatility on the Australian market. Economically sensitive stocks have been sold off faster than ever as the last of the believers head for the exits. Debt and leverage have again become dirty words and companies that have not learnt from the lessons of 2009 are in for a rough ride as shorters move in. Trends have been clear, support and resistance levels have been attained and entry opportunities have been plentiful. Basic support and resistance points are a wonderful thermometer for market sentiment – and what better place to gauge market temperature than the ASX 200.

On the ASX 200, 4450 has proven a strong short-term base as global technical headwinds push the bourse lower. Although weekly support was tested on seven occasions in close succession, underlying value remains strong at both a technical and a fundamental level, thanks to a number of large-cap stocks. Prudent analysis quickly reveals a number of opportunities from both sides of the trading and investing spectrum...

Excerpted from an article originally published in the Sep/Oct 2011 issue of YourTradingEdge magazine. All rights reserved. © Copyright 2011, Your Media Edge Pty Ltd.
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