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MM are buying a technology stock into current weakness.
The ASX200 endured some May wobbles last week falling almost 3% by Thursday afternoon, subscribers should remain conscious that the average decline for May & June combined over the last decade is -4.8% which by definition means at its worst the intra-month pullback would have been deeper e.g. last year we saw a -7.7% retracement even while the market was enjoying a phenomenal post COVID recovery.
This week saw the ASX200 surrender all of its gains for May In just 3-days as the mantra of “buy on dips” appeared to revert to “sell the rallies”, the net 1% decline would have indeed been far worse if heavyweights Commonwealth Bank (CBA) and CSL Ltd (CSL) hadn’t enjoyed sold gains.
A decent bounce into the weekend meant that the local index closed only 66pts lower on the week, less than 1% down on the close last week/ It felt like a far more painful 5 days though.
Yesterday saw the ASX200 fall another 62-points finally breaching the psychological 7000 area in the late afternoon, selling was fairly broad based with well over 60% of stocks down on the day although gains in the heavyweight banking & healthcare sectors stymied the losses.
It took a couple of goes at it, but today the ASX broke down through the 7000 level to a 3 week low.
Yesterday saw the ASX200 fall another 52-points testing the psychological 7000 area in the early afternoon, the worm certainly hasn’t turned yet but there’s definitely some cracks forming in some global indices and local sectors.
The profit taking continued today with the ASX pulling back from Tuesday’s peak. The index did manage to put on a few points from its mid-afternoon low with buyers stepping up as the index approached the 7000 level.
Overnight we saw Treasurer Josh Frydenberg spend big in an effort to create another 250,000 jobs, there’s obviously no concerns around inflation or debt levels at this point in time. The booming mining sector has enabled the cash splash from revenue not envisaged by many a year ago when the pandemic dominated most conversations.
The market took a step back today, joining international markets in a pullback against recent gains. Tech continues to be in the firing line as growth expectations are curbed by interest rate forecasts.
