ASX 200’s 500-SMA Reclaim Signals Recovery as Woolworths Earnings Shock Hits Sentiment

Over the past 5 trading days Index futures is down about 30 bps but is up over 1% over the last 24 hours. The declines we saw over the last set of sessions was the longest losing streak since 2018, a mighty 8 consecutive sessions. But surprisingly April was a positive month for the Index, up about 3%.

The gainers for the session were ASX Ltd (ASX), Cochlear Ltd (COH), and Cobram Estate Olives Ltd (CBO) which rose 5.1%, 4.44% and 3.98% respectively. On the other hand the losers were Westgold Resources Ltd (WGX), Deep Yellow Limited (DYL) and Predictive Discovery Ltd (PDI), which were down 9.32%, 9.16% and 8.87%.

The up sectors were Utilities (1.58%), Energy Minerals (1.57%) and Transportation (1.18%) while the sectors that were down were Non-Energy Minerals (-2.49%), Electronic Technology (-2.32%) and Retail Trade (-2.11%).

Indeed, the non-energy minerals sector did pull down the Index. However, the huge grocer Woolworths (WOW), was down 7.78% in the session after the company stated that its fiscal domestic food segment earnings growth would no longer reach the upper end of the range. The stock is teetering on long-term support. WOW’s Supertrend has flipped to negative, its RSI is below 50 and the Z-Score SMA is drifting back towards oversold levels.

Ouch.

High energy prices are starting to hit the earnings.

Woolworths remains under pressure as Renko momentum stalls

0.15-brick Renko of Woolworths Group

Source: TradingView

ASX 200 Rebounds from Late-April Lows

Line chart of ASX 200 Index

Source: TradingView

ANZ Group Holdings (ANZ) has earnings coming up. Recently they announced that they will acquire Woldline S.A.’s 51% stake in their joint venture for an EV of A$89 million, giving the bank full ownership of the march acquiring business. The deal, expected to close in the second half of fiscal year 2026, pending ACCC approval, is estimated to have a small 6 point impact on ANZ’s Tier 1 capital ratio.

ANZ dipped below trend from 22nd April and is yet to get back above it. Support for the stock is observed around the $35.72 price mark. It did make an attempt to get back above trend but this appears to be stunted as observed by the RSI dipped back below 50 and the Z-Score SMA peaking around 1.4. Expectations are for a retest of the 35.72 support level in the short term.

ANZ Rebound Stalls Below the 500-SMA

0.15-brick Renko of ANZ

Source: TradingView

ASX 200 Reclaims 500-SMA as Buyers Aim for Recovery

Traders and investors are blowing a sigh of relief as the ASX 200 pushed back above the long-term 500-SMA for the 24-market version of the instrument. A pivot low was made around 8,598.4, slightly below 8,600. The Z-Score SMA looks a bit extended so I expect there to be some consolidation for the Index post this move higher.

We’re not out of danger yet for the Index but this is a good sign that the 500-SMA held. For now.

But post consolidation I think the ASX 200 would resume its uptrend and make another attempt towards all-time highs in the medium.

ASX 200 Renko Rebounds

15-brick Renko chart showing rebounding back above 500-SMA

Source: TradingView

The Verdict

Current Trend Direction: Neutral

Bias: Positive

Support Levels: 8,255,8,765

Resistance Levels: 9,230

Medium Term Path: The holding of the 500-SMA is a positive sign because those declines were starting to get a bit worrying. I anticipate some consolidation for the Index as the Z-Score SMA is stretched. The wobbly market moves are clearly from the cost impact of the high energy prices. These are real risks. The picture would become much clearer after the consolidation in the Index occurs. Don’t expect a straight rebound back to all-time highs.

The market takes the stairs up and the elevator down!