Weak Banks and Tech Dragged ASX 200 Index as 500-SMA Support Comes Under Pressure

ASX 200 Heat Maps Shows Banks and Tech Drag as Block Bucks the Tape

The last trading session for ASX 200 thoroughly shows the wash out in the Index. The damage came from banks and large-cap names, with WBC down 4.83%, CBA down 1.85% and NAB down 2.91%. WTC dropped 4.63% which could be attributed to tech de-risking rather than idiosyncratic risk. VCX fell 4.71% and property names like GPT and SGP also slipped more than 3%. There was some profit taking in ORI as it fell 3.42% because there was an H1 earnings bounce.

XYZ was the standalone green with a 4.8% positive move after Block reported stronger Q1 profit growth and lifted guidance.

WBC and WTC Slide while XYZ Rallies on Earnings

ASX 200 Heat Map

Source: TradingView

ASX 200 Renko Pullback Tests 500-SMA For Support

After the strong move higher the ASX 200 has since retreated towards the long-term 500-SMA. From these levels it initially appears that support has been found at this SMA with the Z-Score SMA attempting to turn back higher after hitting the -2 spot from the downmove. Some may even argue that it is showing some bullish divergence. RSI is below 50 but has turned higher. For the 8,910 retest the ASX 200 Index needs a Supertrend flips to positive as well as Z-Score SMA trending higher along with an RSI above 50.

ASX 200 Cools After 8,910 Rejection

15-Brick ASX 200 Renko Chart

Source: TradingView

The Verdict

Current Trend Direction: Bearish

Bias: Negative

Support Levels: 8,255

Resistance Levels: 8,910, 9,230

Medium Term Path: The view for the ASX 200 is lower despite that crossover on the 500-SMA. There’s heavy resistance at the 8,910 and 9,230 levels. Hopefully though the Index consolidates from here and makes another attempt at 8,910. If not, it can break below the 500-SMA and retest 8,255 support.