ASX 200 Forecast: Tech Surge Can’t Flip Bearish Bias While 8,800 Caps Recovery

Tech Helps The Session, ResMed Drags

We see Xero flying high at +7.69% and Pro Medicus is green by roughly 9%. So growth software is taking the lead today. On the other end of the spectrum there’s ResMed, down by over 7%. All in All the ASX 200 Index is flat for the day.

ASX 200 Index Heat Map Showing Strong Gains in Technology Names, With Xero Up 7.69%, Pro Medicus Up Around 9% but ResMed Down 7.58%

June Offers Little Support

Looking at seasonality, while there’s a likelihood of 70% of a positive return in June, the average return is only 0.29%. It’s better than nothing. YTD the ASX 200 Index is up only 0.17% for the year. On the brighter side things look better in July. So hopefully the momentum starts in this month.

ASX 200 Index June Seasonality Leans Slightly Positive

8,800 Is The Gatekeeper

The ASX 200 Index is still below both its short and long term Supertrends. The bulls have spent over a month below the short term Supertrend, failing to break above that level of resistance. The Index desperately needs a weekly close above 8,800 to engineer a change in trend and structure for itself.

ASX 200 Index Remains Below Heavy Supertrend Resistance

Bulls Consolidating Around The Daily 21-EMA

Delving into the daily chart of the ASX 200 Index, we see that price is sitting on top of the 21-EMA. RSI is a bit neutral, hovering right below the 50 level. On a positive note we do see the 21-EMA turning a little bit higher, denoting a positive change in trend. Hopefully momentum picks up so it can test the 8,910 pivot high and break higher.

ASX 200 Tests Thin 21-EMA Support

20-Brick Recovery Still Looks Fragile

After getting above the 500-SMA, the ASX 200 Index couldn’t hold above for too long and subsequently brought red bricks back underneath it. The Index is currently testing the 21-EMA on the Renko with the Supertrend still positive. Also, the ASX 200 Index is above its 50-SMA. But what I’m worried about is the current momentum. The Z-Score SMA has turned lower off overbought levels with the RSI trending lower as well but still above 50. Hopefully this is just the ASX 200 Index consolidating around the 500-SMA. But if it breaks through the Supertrend and 50-SMA, it’s a resumption of the downtrend.

ASX 200 Index 20-Brick Renko at 21-EMA

Current Trend Direction: Bearish

Bias: Negative

Support Levels: 8,255

Resistance Levels: 8,800, 9,230

Medium Term Path: The ASX 200 is consolidating. But since the weekly structure is still bearish I have to keep my current trend direction bearish with a negative bias. I need that confirmation. The ASX 200 needs to continue to rebuild by first getting back above the 500-SMA.