This is our weekly ASX MoMo (momentum) report. We have analysed the ASX 200 through our stock screeners to give you the top stock recommendations with positive and negative momentum to help you get an edge in your trading. We also look at whether the ASX may be primed for a reversal based on its market internal indicators.
In this report we look at:
- The ASX looks to be in for some further heavy selling this week in the wake of the Brexit decision
- We intiate shorts in Qbe Insurance Group (AX:QBE), Henderson Group (AX:HGG) and Brambles (AX:BXB)
- We hold longs in a few stocks that may outperform in a selloff: Stockland (AX:SGP), Investa Office Fund (AX:IOF) and Pact Group Holdings (AX:PGH)
- The market internals for the ASX have deteriorated dramatically, but the index looks like it has further to fall
- Stocks that have seen unusually high volume moving through them, often precipitating major moves
The ASX has been hit dramatically by the fallout from the UK’s Brexit vote. Monday saw a bizarrely overly optimistic buying, as investors piled in with vigour. But the full consequences of the Brexit vote are still slowly playing out, and consistent further selling in the market seems likely.
If this selloff is anything like those of the previous twelve months, then there’s a good chance the ASX ultimately pulls back to 4800. But 5000 is the most important level in the near term, and there seems to be plenty of global pessimism to push the index through it.
To read the entire report, please click on the PDF file below: