Top pick for the day - Australia’s ASX200

The road south looks clear

The Australian ASX200 (ASX200) is likely on its way down and that down could be big.

We have previously warned that the ASX200 could be heading lower (see 24th July issue) soon but prices managed to see a minor push above the previous swing high of 5,719 to 5,728 before turning lower.

The short push above the said high does not change the overall bearish outlook for the ASX200.

We have tweaked the wave counts marginally and prices appear to be in its third wave down right now.

Prices could easily retest the October 2014 lows of 5,122 (1x of wave 1) but we expect prices to test the 4,750 levels (1.618x of wave 1) next as long as the recent swing high of 5,728 remains intact.

Note that last week’s close was a bearish engulfing pattern that engulfed the candles of the prior 3 weeks, which is a pretty significant reversal pattern.

Watch out below! (Read Report)

Source : CIMB Research