ASX Week 8 2006 - Outlook

Submitted by Craig Strzelecki on 19 February, 2006 - 11:36

The ASX All Ordinaries has broken a support line at around 4820, this movement could prove to be a weak correction, especially if the secondary support at 4730 holds. Shares could open flat to start the week off on Monday but may end up in higher territory due to a recent jump in oil prices and gold on Friday night. On the flip side, the Aussie markets may be a little cautious due to the Presidents' day Holiday. This week is the arguably biggest week for the ASX market with over 70 major companies posting earnings as part of our local "Profit Reporting Season".

Gold rose by $US7.58 an ounce lift in gold to $US552.10 and a $US1.42 a barrel increase in oil to $US59.88. AMP Capital Investors head of investment strategy Shane Oliver said that "Last week was pretty poor so we are probably due a bounce." Because of the slight correction noted above, CommSec chief equities economist Craig James noted that "The market's price- earnings ratio has dropped sharply to around 15.5 times [earnings] so there is now a bit more value in shares."