ASX 200 Forecast: Miners & Lower Yields Lift Index As Energy Stocks Slide

Miners Carry The ASX 200 Index As Energy Stocks Slide

Miners held the ASX 200 Index higher. BHP and Rio are green, with Fortescue being higher as well. Newmont is the leader with an over +5.0% move. On the other end the energy sector took a hit. Woodside is down 4.24% and Santos is down 3.64%. This is in line with what’s happening on the ground. Oil dropped nearly 6% as US-Iran peace deal optimism hit energy producers, while gold strength and Newmont’s recent record Q1 earnings/free cash flow update gave gold names a stronger bid.

ASX 200 Heat Map Showing Strength In Miners, Mixed Banks, Weakness In Energy, And Newmont Leading The Gainers

Weekly ASX 200 Still Below Supertrend Resistance

I’m seeing a little light at the end of the tunnel with regards to the declines in the ASX 200 Index.But that’s just it. Little light. The Index is rallying towards the short term Supertrend after bouncing well off the 8,255 level. Nonetheless the overall trend remains in a downtrend until those Supertrends flip.

ASX 200 Heat Map Showing Strength In Miners, Mixed Banks, Weakness In Energy, And Newmont Leading The Gainers

Daily ASX 200 Back Above the 21-EMA

Drilling into the daily chart we see the price above the 21-EMA. Price has reclaimed the 21-EMA but the EMA is still trending lower. RSI is back above 50 though. Early signs of a change in trend. Very early. The Index needs to hold above that 21-EMA.

Daily ASX 200 Chart Showing Price Back Above The 21-EMA

Australian 10-Year Yield Breaks Lower

Yields down. Stocks. The Australian 10-year yield has rolled over hard from the 5.15% area and is now breaking below the 5.00% zone, with RSI near 33 and the Z-Score SMA washed out. Looking at the momentum again, the RSI and the Z-Score SMA, they are both nearing exhaustion levels, coincidentally near the 4.85% support zone. So we need to see how the yield behaves at that level. Would it hold and shoot back higher or just make a dead cat bounce to make a lower low?

Australian 10-Year Yield 0.025-Brick Renko Showing Yields Falling Below The 50-SMA and Supertrend Zone As Rate Pressure Eases

ASX 200 Renko Tests The 500-SMA Wall

Strong short term moves on the ASX 200 Index with it nearing the 500-SMA. That double bottom pattern observed earlier really held. RSI is above 60 with the Z-Score SMA approaching 2. There is still some room momentum wise to take the Index back above the 500-SMA. More than likely the ASX 200 Index will bounce around that long term level before it finally decides where it wants to go.

ASX 200 20-brick Renko Showing Price Recovering Above The 50-SMA and Pushing into the 500-SMA

The Verdict

Current Trend Direction: Bearish

Bias: Negative

Support Levels: 8,255

Resistance Levels: 8,800, 9,230

Medium Term Path: Momentum should take the ASX 200 back above its 500-SMA on the Renko. However, I believe that the Index would consolidate around that level before it makes a move higher or lower. But despite these positive moves the current trend direction is bearish with a negative bias. We need confirmation.