It is not surprising that the current market is very volatile. Wherever you are, it seems that as soon as you mention the word “debt”, investors and “moms and dads” seems to hide under covers.
One of the current area that is affected mainly is the banking sector. At the moment, let us focus on the Australian Banks in particular.
Whilst margins face an enormous pressure, Australian banks have also benefited from stronger asset growth given the shift towards business growth from the household mortgage sector. However, earnings stress continue because of higher wholesale funding costs, weaker wealth management income and higher impairment costs. Until, the banks can minimise or greatly reduce these costs - Australian banks in particular will get little support from investors.
The US Federal Reserve - struggling to maintain a confidence crisis in the economy, will for the “first time” lend treasuries in exchange for debt that includes mortgage backed securities. They intended to inject up to $200B to increase liquidity in the financial markets and help relieve the pain in credit markets.
Overnight the Australian futures gained up to 175.3 points and the Japanese futures increased around 315 points.
Technical Analysis on Australian Banks:
Let us now look at some technical analysis on the major Australian banks.
Looking at the 10 year chart overview of ANZ bank (ASX: ANZ), it is currently sitting at around $19.67. As a matter of fact, as of this writing - it is sitting at around $20.67. It has bounced back up from the support line at $19.67 and may hover around $20.67 and the resistance level at $23.59.
The next chart shows the 10 year chart overview for Commonwealth Bank (ASX: CBA) as of the 12th March 2008. It is currently sitting at $39.45 and as of this writing is now at $39.75. The latest news from the US may help it fill the gap at $41.45 and if it closes this gap and continue higher, it may consolidate around this price up to $45.00.
The next chart shows the 10 year overview for Macquarie Group (ASX: MQG) as of the 12th March 2008. This is a stock that has been beaten badly due to the global credit crisis. It had reached to around $100 in May 2007 and is now sitting less than 50% at around $44.46. As of this writing, it is currently at $46.99. There is a gap at around $53.59 and it may try to close this gap. Should this occur and go higher, it may consolidate around this price to around $60.00.
This chart shows the overview of National Australia Bank (ASX: NAB) over ten years as of today the 12th March 2008. NAB is currently sitting at around $26.10 and has matched its August 2004 low. As of this writing, it is currently sitting at $27.06. The latest increase in stockmarket activity, may help it trade around $28.00 to $28.50 mark.
This chart shows the 10 year overview of Westpac Banking Corporation (ASX: WBC) as of today the 12th March 2008. It nearly hit its support line at $20.11 and decided to go higher. As of this writing, it is currently sitting at around $21.83. the last candle showing a strong buying signal. The strong buying signal may help it go higher but watch out for the resistance line at $23.37, which also matched its August 2007 low.
It would be interesting to find out what happens especially after the US Federal Reserve’s statement on the injection of up to $200B in the economy to increase the financial liquidity and ease the global credit markets.
****************************************
Disclaimer:
The information on Trade to Success.com is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it, in regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice prior to making a decision.
Please ensure that you understand the risks of direct investing before risking your capital.
All opinions expressed represent Trade To Success’ views as at the date of publication and may change without notice. The information contained herein is for information purposes only, and is not intended as an offer or solicitaion with respect to the sale or purchase of any security or financial product.
****************************************
Popularity: 65% [?]
