Running out of puff

Chief Market Strategist, CMC Markets
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The Australia 200 index has had a stellar run since December 24, gaining more than 16% in less than three months. However, the price action is now pointing to weakening, and the potential for a correction could be increasing. Last week's miss on GDP numbers and softer than forecast retails sales growth follow an uninspiring February reporting season. It may be time for investors to batten down the hatches.

The price of a stock, or of the broader market index, is a reflection of the balance of investor opinion. It’s a sincere opinion, because participants are putting money on the line in expressing those opinions. Professional investors and traders use charts to assess the overall balance of views, and pay particular attention when price trends change.

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