ASX 200 Pulls Back on Wednesday

• Australia gives back the gains found on Tuesday.
• Global Economies continue to be a major factor in the ASX 200.

Wednesday has seen the ASX 200 pull back somewhat significantly, to wipe out most of the gains that we have seen come into the market on Tuesday. All things being equal though, the market is still very bullish, and therefore traders will be looking for some type of value, assuming that the trend can hold itself.

Most traders will be watching the AU $8350 level for signs of support, followed by the AU $8200 level. Ultimately, this market remains closely tied to the global economic outlook. Australia’s heavy reliance on commodity exports makes it particularly sensitive to shifts in the flow of goods and services.

As long as the rest of the world is doing reasonably well, Australia tends to benefit. At this point, there are a lot of questions asked of global economies, but the one thing that simplifies the outlook for the ASX 200 is the fact that there is so much momentum to the upside over the last several weeks. Because of this, many will remain optimistic.

Goodman Group (GMG)

Goodman Group gained 0.86% during trading on Wednesday after initially dropping. What’s interesting is that GMG has found itself levitating above the 200-day EMA, showing signs of strength. It’s interesting that this market continues to run higher after gaining almost 15% for the previous month.

However, the last year is still negative by 3.8% in this market. That being said, the momentum seems to be swinging to the upside as a major resistance barrier in the form of AU $32 has been breached. Citibank has recently reiterated its positive outlook for Goodman Group.

REA Group Limited (REA)

REA Group Limited gained 1.94% during the tumultuous Wednesday session, as it continues to build on the 2.9% gain for the last month and the astonishing 33.75% over the previous year. REA, a communications services giant, remains one of the stronger performers in the ASX 200.

It is now trading above the 50-day EMA and appears to be targeting the AU$260 level, supported by a previous short-term consolidation zone. As we have seen multiple times over the last several weeks, REA seems to have significant support near the AU$235 level.

Northern Star Resources Limited (NST)

Northern Star Resources found itself dropping 0.78% during the Wednesday session, as it continues to see a little bit of weakness over the last month, which is down 1.73%. However, over the past year, NST has gained 41.73%.

Given its key role in Australia’s commodity exports, the materials giant remains sensitive to global economic sentiment. The market appears to be respecting the AU$21 level as resistance for now. However, it is worth noting that this level was breached quite significantly a few months ago.

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