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Equity Indices

The ASX200 has fallen 16% since its April high but MM believes a reprieve from the aggressive selling witnessed through June has already commenced, on balance we believe the recent 6407 low will prove a solid platform for a 300-400 point bounce.

  • MM continues to believe the Tech Sector will outperform the Energy Sector over the coming weeks i.e. some distinct rotation back from value into growth stocks.
  • We can see the local index challenging the 6750-6800 area over the coming weeks where it’s likely to encounter major resistance similar to the 7288 top at the start of the month.

Aggressive investors may have followed our rhetoric over the last 1-2 weeks to move up the “risk curve” into Junes weakness but on balance, we feel greater value will be added to portfolios by selling / de-risking into our anticipated bounce assuming it unfolds according to plan – at this stage we anticipate reducing our tech / growth exposure into strength but moves will be largely determined by prices at the time.

MM is bullish the ASX200 short-term
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