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In the latest edition of ChartWatch ASX Scans, we observed a notable shift in the trends affecting the Australian stock market. The ratio of stocks in uptrends versus downtrends has significantly decreased to 0.4 to 1, indicating that there are now 2.5 downtrending stocks for every one that is trending upward. This stark contrast comes after a period when the ratio soared to a record-high 17 to 1 during the ASX 200’s ascent to its peak on 25 August.
Such indices can provide insight into the overall market sentiment. Recently, I started tracking the Uptrends and Downtrends ratios, revealing how closely they align with the underlying demand-supply dynamics in the market. A narrowing ratio suggests that these dynamics are approaching equilibrium, indicating potential changes in market direction.
While some analysts typically focus on market breadth—tracking the general strength of a market through up and down volume—my approach goes beyond that. By analysing the demand and supply-driven movements of stocks, my Uptrends to Downtrends Ratio offers a more nuanced view of market conditions.
Key Insights on the Uptrends and Downtrends
In today’s scan:
- Uptrends Scan List highlights companies showing significant upward momentum:
- 29METALS (ASX: 29M): Price at $0.395, up 41.1% over one month and 23.5% over a year.
- 4DMEDICAL (ASX: 4DX): Price at $1.155, with impressive monthly gains of 244.8%.
- Artrya (ASX: AYA): Currently priced at $2.22, reflecting a remarkable 572.7% increase year-on-year.
These promising trends have intrigued investors looking for stocks to buy amidst changing market dynamics. It’s also important to note that some stocks have appeared consistently in the lists; regular monitoring is necessary to understand when trends begin to shift.
Today’s Downtrends
Conversely, the Downtrends Scan List points towards stocks experiencing significant selling pressure:
- Australian Clinical Labs (ASX: ACL): Current price $2.61, down 4.4% over the last month.
- Accent Group (ASX: AX1): Trading at $1.335, down 10.4% in the same time frame.
- Domino’s Pizza Enterprises (ASX: DMP): Now at $14.12, suffering a significant drop of 24.4% over the past month.
Stocks in this list may present opportunities for those looking to short sell or avoid downtrends altogether.
Cautionary Notes for Investors:
- The future remains uncertain; today’s trends can change suddenly.
- The lists are curated and not exhaustive—careful observation is crucial, as stocks may drop in and out depending on their performance.
- This content is intended as educational and not as an investment recommendation. Investors need to conduct their own analysis.
ChartWatch aims to keep investors updated on market trends and assist them in making informed decisions. Always remain diligent in researching before acting on the analysis or trends presented in these scans.
