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Good morning CVELU, Last week, I highlighted how oversold conditions were building across the Australian market. That remains the main theme this week, but I’m now seeing a few more signs that the selling pressure is starting to weaken.
Across several major indices and sectors, prices are either sitting at significant support zones or showing bullish divergence. In simple terms, the market is still falling, but the momentum behind that fall is weakening.
That has me leaning towards a bullish week, or potentially a stronger relief rally over the next week or so.
I’d still like to see some confirmation early in the week before getting too excited. A final push lower or a strong reversal from these support zones could provide that.
Materials are particularly interesting, with the sector sitting right on a major support area. Gold and silver are also around important technical zones and remain on my watchlist for signs buyers are returning. Crypto continues to look strong to me as well, with the broader structure continuing to improve.
A lot of markets are stretched, oversold and sitting around important support. That doesn’t guarantee the correction is finished, but the conditions are certainly there for a decent bullish bounce this week.
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