A 2.1% rally by Australian shares last week ensured Australian shares posted its best week in seven last week. An uptick in commodity prices, a strong US data all boosted hopes of an economic recovery and lifted sentiments globally.
Energy stocks gained 1.7% as oil prices climbed up on positive US economic data and expectations of a strong rebound in global fuel demand in the third quarter. Santos and Oil-search were the biggest beneficiaries of rising oil prices. All eyes however are on India which is the third-largest oil importer in the World. Any increase in Coronavirus cases there can quickly dash hopes of oil demand and crash the oil prices.
The financial stocks continued their way up with all Big four continuing their way up. We talked
about how we see CBA getting to $100.00 two weeks ago. As predicted the Commonwealth Bank closed the week at $100.56. However, it was the Westpac Bank that was the best of the four and we feel should continue to lead the gains in financial stocks over the next few weeks.
The materials and finance sector as we pointed out in our commentary last Monday both had a great week, however one stock which was particularly impressive for South32 which raised by 5.6%. For this week we like particularly Tabcorp which has had a $4 billion takeover bid from Bet-Makers and Domain which has been gaining on prospects of improving the Australian housing market.
In the crypto world last week we talked about the crash we ought to have. While the crypto market is showing signs of recovery the market keeps falling. Looking at the charts and seeing the trends the Bitcoin need to recover soon to at least US 41,994. A failure to capture that price sooner can see prices retrace back to $30 K. A bounce above USD $42,000 on technical analysis can see Bitcoin reach new highs.
Having said that a fall below $30,000 can dash the hope of any recovery till 2025 in true Bitcoin fashion. In the Crypto world, though Cardano is the one that continues to show great strength and is clearly our favourite and one we expect to provide the best results during the recovery.
In regards to the Australian dollar, we have been mentioning how we see it losing steam especially against the Indian Rupee. This week the Rupee continued to strengthen against the Aussie dollar with 1 Australian dollar buying INR 55.82 at the time of writing this article. We expect the Rupee to continue to strengthen against the Australian dollar as the Corona situation in India improves and commodity prices turn south.
The Australian dollar fell against all major currencies too such as Euro, Pound and Canadian Dollar. The eyes will be on China this week as a fall in Iron prices due to demand from China will result in more weakness for the Aussie.
Gold had one of its best weeks and went past USD 1900 an ounce. If the US economy continues its swift recovery and inflation continue to heat up Gold will be in plenty of demand and can rally towards that USD 2000/ounce mark.
Author:
Ateev Dang is a trader and trading coach by profession. He runs his own business Glow trades Pty Ltd. Here, he teaches anyone who is interested in starting on their trading journey how to trade. He can be contacted at adang@glowtrades.com.au.
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