Are you watching CBA? In our last FREE Newsletter we told you to watch five charts. CBA and BHP were two of those charts. CBA is trying hard to get back above the long term trend line and resume the rally. If the bulls are successful in doing this, the broader ASX200 will rally because of two things. Firstly, there is a trickle down effect. CBA is the largest listed stock on the XJO by capitalisation. Therefore, when it rallies, like yesterday, it lifts the XJO by about 15 points by itself, so our market looks like its going in the right direction. Secondly, this bullishness has an effect on the entire market like a vortex and it sucks in day traders and other investors and traders who (impulsively) decide they need to be a part of the rally. As a result, we get some overflow of money from the leading stocks such as CBA and BHP into second tier stocks such as ANZ, RIO and so on.
Stocks which have hit our radar screen are NVT, NXT and ALL. Their charts are provided below.
