ASX 200 afternoon report: 27th of January 2023

The ASX 200 trades 34 points (0.46%) higher at 7502 at 2.45 pm Sydney time.

The ASX 200 today traded to a fresh nine-month high, seemingly rejuvenated after yesterday's Australia Day public holiday and a strong session on Wall Street overnight.

Confounding those expecting an imminent slowdown in the world's largest economy, US growth data surprised to the upside overnight.

Q4 GDP beat estimates (2.9% vs 2.6% expected). Durable goods rose by 6.3%, while jobless claims fell to a nine-month low (197.5k vs 206.75k last week).

Throwing a bone to the bears, weaker-than-expected consumer spending within the GDP data, following a patch of soft retail sales - evidence that the Feds rate hiking cycle is dampening demand.

IT sector

The IT sector has outperformed, led by Megaport.

• Megaport added 6.2% to $7.36
• Sezzle added 6.15% to $0.69
• BNPL stock ZIP added 4.92% to $0.69c
• Tyro Payments added 4.18% to $1.56 on news that it had agreed to provide Potentia four weeks of due diligence to return with a higher bid.

Consumer-facing stocks

Consumer-facing stocks have shrugged off concerns that the RBA will resume its rate hiking cycle in February, following Wednesday's hotter-than-expected Australian inflation data.

• Myer Holdings added 1.85% to $0.96c
• a2M added 1.72% to $6.79
• Treasury Wine Estates added 1.42% to $14.30
• Blackmores added 1.40% to $86.61.

For more on Australia's CPI data, read Tony's CPI print turns the blowtorch on RBA and ASX 200 analysis.

Financial sector

The ASX financial sector is on track to lock in a fourth week of gains in January (+5.94%).

• Macquarie added 1.60% to $188.07
• ANZ added 1.34% to $24.93
• NAB added 1.18% to $31.85
• Westpac added 1.08% to $23.93
• CBA added 0.95% to $109.85 to be just $0.35c away from its all-time high at $110.19 after breaking above downtrend resistance.

Mining sector

The mining sector experienced a mixed day.

• BHP added 0.81% to $49.65
• Rio Tinto added 0.70% to $127.34
• Fortescue fell 0.09% to $22.46, despite a strong production report
• Yancoal fell 8.92% to $5.92
• NextGen Energy fell 8.33% to $5.89
• Whitehaven fell 6.42% to $8.47.

For more on the Australian stocks, read Tony's Three ASX stocks to watch article.

Technical analysis

The strong rally in the ASX 200 during January has the RSI indicator into overbought territory. For the Elliott Wave enthusiasts, there is evidence of a five-wave advance from the October 6411 low on bearish RSI divergence, which warns of a pullback.

We continue to favour trimming longs ahead of the bull market 7632 high and looking to either buy a sustained break of the 7632 high or a pullback into the 7200/7000 support area.

The AUD/USD is trading at .7113, supported by risk-seeking flows and Wednesdays hotter than expected Q4 AU inflation data. After reaching and marginally breaching our August .7137 target, we would like to see a pullback towards .6900c to work off overbought readings.

ASX 200 daily chart

Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.