In today’s Chart of The Day, we take a look at ANZ (Australia & New Zealand Banking Group Limited), one of the ‘Big 4’ banks listed on the ASX 200. As the global pandemic continues to wreak havoc among the various business sectors, ANZ’s share price has suffered considerable losses in recent months, as did the ASX in general.
We’ll examine where the stock may be heading using the Point & Figure method to highlight supply & demand areas and see if a potential recovery is on the cards.
What instantly jumps out of the chart above is the Coronavirus outbreak’s raw carnage, with a dramatic slide in price earlier in the year. This P&F chart shows $14.25 as the place where buyers finally stepped back in, increasing demand, and providing a ray of hope to those bullish on ANZ. Note the downward trend switched to a bullish support line at this lower region, as we see a sell signal followed by a buy signal.
Therefore, the longer-term trend is now bullish, and ANZ could be eyeing a move higher following an extended period of consolidation since June. As per the chart, we see $22.25 as a long-term target, potentially acting as significant resistance should the stock continues to rise.
I’ve also included a simple line chart below to highlight the sheer length of the trading range. As to the cause, perhaps traders are caught in a state of flux for months now, just waiting for clarity surrounding the pandemic. Although, as a defensive stock, we’d typically expect a more positive sentiment given the circumstances. Who knows? Maybe the start of the bullish support line mentioned earlier is linked to such activity.
Although the stock appears bullish longer-term, it will most likely become a passenger of the ASX Index movements in general. I’ve included a line chart of the ASX200 below, and despite being less pronounced, it also reflects a rangebound move since June. As the old saying goes, “A rising tide lifts all boats” and vice versa.
For those interested in trading ANZ as a share CFD, Go Markets has this stock and many more, including companies from the ASX, NYSE, and the NASDAQ.
Note: Click on charts to enlarge.
By Adam Taylor CTEe
Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg
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