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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

ASX 200: three stocks to watch as of 16 January

As we enter the third week of trading for 2023, Tony Sycamore looks at three ASX Financial stocks that appear to have technical and macro support.

Source: Bloomberg

ASX 200 overview

Last week the ASX 200 added 3% to close at 7328, for its highest weekly close since April 2022. After extending its rally on Monday morning, it is just ~3% below its all-time high of April 2022.

The rebound in the ASX 200 has been the result of China’s reopening, and a welcome cooling in US jobs and inflation data that will allow the Federal Reserve to downshift the pace of its rate-hiking cycle.

At a sector level, the ASX Materials Sector added 8.62% in the first two weeks of 2023 to close last week just 2% below its all-time highs, benefitting from stronger commodity prices and as heavyweight Materials Sector member BHP punched to all-time highs.

Elsewhere the ASX Financial Sector, added 2.79% last week but remains 5% below its all-time high. After the majority of Wall Street banks reported on Friday night beat earnings estimates, further upside in the ASX Financial sector seems likely.

The article below looks at three ASX Financial stocks that appear to have technical and macro support from the tailwinds noted above.

  • CBA

CBA added 3.22% last week to close at $106.50. Its share price is up over 19.5% from its October $89.66 low. As viewed on the chart below, there is downtrend resistance coming in near $109.00 drawn from November 2021, a $110.19 high, which should provide initial resistance if tested.

However, if the share price of CBA can see a sustained break above resistance at $109.00/20, it opens up a test of the $110.19 high, before a possible test of $112.00.

CBA chart

Source: TradingView
  • Westpac

The share price of Westpac climbed by 1.54% last week to close at $23.76. Its share price is up over 17.25% from its October 2022 $20.42 low. As viewed on the chart below, there is downtrend resistance coming in near $24.20 drawn from the June 2021, $27.12 high, which should provide initial resistance if tested.

However, if the share price of Westpac can see a sustained break above the downtrend resistance at $24.20 and then above the 2022 $24.67 high, it opens up a test of a thick layer of resistance between $26.10 and $27.10.

Westpac daily chart

Source: TradingView
  • Macquarie

The share price of Macquarie added 3.37% last week to close at $178.27. Its share price is now up 20% from its October 2022 $149.51 low. As viewed on the chart below, there is resistance coming in near $181.20, the neckline of a possible inverted head and shoulders bottom.

If the share price of Macquarie can see a sustained break above the downtrend resistance at $181.20 and then the 2022 $24.67 high, it opens up a test of resistance between $190 and $192.00. Should the share price of Macquarie then clear resistance at $192.00ish, the next target is the $210/20 region coming from the 2022 highs.

Macquarie daily chart

Source: TradingView

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This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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