ASX200 rides another wave higher

Reports overnight that a vaccine developed by Pfizer and BioTECH was found to prevent more than 90% of symptomatic COVID19 infections, relegated the U.S. election to the back seat, at least for now.

November 9, 2020 10:50 PM

Providing further research confirms the vaccine is safe, the companies will seek emergency use authorisation by year-end, before a potential rollout in 2021. Offshore equity markets for the better part reacted positively. In the interest rate space, U.S. 10yr bond yields rallied 10.5bp, to 0.92%.

The rally in bond yields explaining why the interest rate sensitive NASDAQ bucked the trend to finish the session -2.16% lower. On the other hand, higher yields the catalyst for the European Banks Index to breathe a sigh of relief and finish up over 12% on the day.      

A move that is being partially replicated in Australia today. The “Big 4” Australian banks that make up about 20% of the ASX200 are trading ~5.50% higher at the time of writing. Also helping the ASX200, a rise in the NAB business confidence index to its highest level since May 2019 in response to the emergence of Victoria from lockdown and falling COVID19 case numbers.

All of this has provided further support to the idea on the ASX200 contained in our last article here where we suggesting adding to core long ASX200 positions in expectation of a test and break above 6200.

With the break above 6200 now cemented, it's an opportune time to return to the chart of the ASX200 from 2017 to gauge how far the rally can run.

In 2017, after breaking out of the top of a five-month range, the ASX200 rallied almost 5% in just under one month. If similar were to occur in 2020 it would project a move towards 6500 by Mid-December, about the time the Santa Clause rally kicks in!

In a nutshell, providing the ASX200 holds above support, formerly resistance 6200/6150 area, supported by a rotation back into the banks, the prognosis for the ASX200 remains bullish into year-end with potential towards 6500 and then 6800.

ASX200 rides another wave higher

Source Tradingview. The figures stated areas of the 10th of November 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

Related tags: ASX Equities

Latest market news

View more
2025 AUD/USD Technical Outlook Preview
Yesterday 04:00 PM
2025 AUD/USD Fundamental Outlook Preview
December 25, 2024 08:00 PM
2025 Gold Technical Outlook Preview
December 25, 2024 02:00 PM
2025 Gold Fundamental Outlook Preview
December 25, 2024 07:00 AM
2025 EUR/USD Technical Outlook Preview
December 25, 2024 02:00 AM
2025 EUR/USD Outlook Fundamental Preview
December 24, 2024 08:00 PM

Open an account today

Experience award-winning platforms with fast and secure execution.
Open account

Web Trader platform

Our sophisticated web-based platform is packed with features.
Learn more
Economic Calendar

Latest ASX articles

Close-up of market chart
Yen thrown overboard post BOJ, ASX selloff looks stretched
By:
Matt Simpson
December 19, 2024 10:26 PM
    Research
    ASX 200 Analysis: Santa’s rally timing could be down to the Fed
    By:
    Matt Simpson
    December 17, 2024 10:06 PM
      Research
      Nasdaq’s record high scoffs at Dow’s worst run in 12 years, ASX follows
      By:
      Matt Simpson
      December 16, 2024 09:52 PM
        Research
        AUD/USD support dependent on USD/CNH resistance, ASX set to bounce?
        By:
        Matt Simpson
        December 11, 2024 10:05 PM

          This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

          StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

          In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

          StoneX Financial Pte. Ltd. is not under any obligation to update this report.

          Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.