Australian Securities Exchange (ASX): Elliott Wave Counts and Forecasting

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The Australian Securities Exchange (ASX) is Australia's primary securities exchange. It was created by the merger of the Australian Stock Exchange and the Sydney Futures Exchange in July 2006.

Today, ASX has an average daily turnover of $4.685 billion and a market capitalisation of around A$1.4 trillion, making it one of the world's top-10 listed exchange groups, comparable to the New York Stock Exchange, London Stock Exchange and Deutsche.

Elliott Wave Analysis has always helped to know the forthcoming trend in any asset class and that is why it is world renowned theory. We have applied this theory in ASX to know what is next for this index. Using Elliott Wave and other technical indicators like moving averages, MACD etc with technical tools like channels, retracements helps to know the possible support and resistance levels. 

In the below daily chart of ASX, the index is moving up precisely in an upward sloping blue channel which is positive sign. The formation is also very positive as it is crossing its previous highs and making a lower bottom. 

We have also used long term moving averages 100 SMA (green) and 200 SMA (purple). The smaller moving average 100 SMA has crossed 200 SMA from below which opens positive possibilities, happened on September 2012, thereafter prices are quoting above both the moving averages which indicates that up trend is very strong.

Using technical indicators like MACD which is a slow indicator helps to understand when to buy and when to sell. Here, MACD has given a fresh buy signal, as the moving average (red) has crossed the trigger line (dotted line) from below. Again the indicator continues to stay above the equilibrium i.e. 0.

As per wave theory, prices are moving up in a complex correction from June 2012. In March 2013 prices completed wave W at 5174 levels followed by wave X at 4610 in the month of June 2013. Currently it is moving up in the form of wave Y in which it is moving in complex correction (w-x-y).

In short, our view for ASX is positive as this index can move up till 5550 levels over short term.



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