Aussie market mounts a recovery

The Aussie market has had a stellar run over the past few months and recently managed to retrace 61.8% of the fall in the midst of the GFC. 

From highs near 6800 in 2007, it was a spectacular fall from grace for the ASX as it hit lows near 3100 in 2009.

The recovery has been mounting significant momentum and this has continued this month with a confirmation of a close above the 61.8% retracement of the fall from 2007 to 2009. While it is always tempting to take profits, there is no indication that sentiment is waning unless we get an unexpected escalation of the Ukraine situation.

The uptrend is well intact with key moving averages pointing higher. For traders who are already long, trailing stops would be a good strategy as it is difficult to pick where this run will end. Short-term momentum indicators could be a good way of indicating a change in trend, particularly if the 20-day EMA crosses below the 50-day EMA. Medium-term plays could use the 100-day EMA as an uptrend support line and exit on a close below it.

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