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CFD News: ASX200 returns to a key supply area

April 21, 2022
by Joseph Jeffriess, Market Analyst

Today we are looking at the ASX200 on the daily timeframe. Price has once again returned to a key supply area. Will we see another rally stopped, or could this be a push into new records?

The ASX200 has put together three solid months after a shocker to start 2022. Price 6.81% in January before buyers got back hold of things and put over 8% back on to the current point in April. So far this week, we have seen 1% added by buyers.

This takes us back to a key area of supply. From roughly 7590 to 7640, we have seen two major trend reversals once price has moved into this area. 13th of August 2021 was the first rejection, and we saw the latest on the 4th of January, which led to a 9% pullback.

Buyers once again have a robust medium-term uptrend in play that got going in March. Earlier this month, buyers broke out of consolidation setting up the new push back to the supply area. Will this run be different and finally break and close above 7640-7652, setting a new all-time high? The ASX has a lead on US indexes as it sits close to all-time records atm. US indexes are pushing higher despite inflation and treasury worries. Their continued momentum might be the lead that ASX buyers need to get to that next step. Australian inflation is rising as the RBA has already hinted at higher rates, but for now, that doesn’t look to be causing too much worry to the short term price.

We will be watching with interest if buyers can continue to push higher or if we will see sellers flood back in once again, holding the supply area.

ASX200 D1 Chart

All times are AEST.