Breaking Out: Will the ASX 200 push on up amid US election volatility?

Breaking Out is a technical analysis-fuelled, short ‘n’ sharp take on chart-busting ASX stocks. Each week, Steve Collette – head of Collette Capital in Melbourne – narrows in on something that’s caught his eye.

S&P/ASX 200 (ASX:XJO)

There is certainly a lot to be worried about. Which might just be the way the market likes it when looking for a wall to climb.

It is a breakout for Australia’s leading share market index above 8,120 – and whilst the banks are just easing back at the time of writing ahead of the RBA call at 2.30pm on Tuesday – that level has held on the index so far. (Ed: At the time of editing, it has indeed held: 8,142.)

It’s a fair dinkum Rolodex of preoccupations heading into the Federal election in the States, which is only six weeks away.

That September is often sighted as the worst-performed month has been a factor also.

Add to this that consensus may have become the previously non-consensus view that the first rate cut in the States is likely to represent the top of the bull run.

All of which might help this index to keep finding new, higher levels to call home.

There will be volatility of course, and that is nothing new.

Acknowledging then that we don’t expect a straight-line drive given all that is in play – 7,900 would be a good level for the XJO to hold – if to keep the outlook bullish into the run into November the 5th.

On the upside – barring the unforeseen – you can pick your target.

We’ll even entertain the idea that October is typically good where September is not.

Collette Capital offers IMA services to wholesale clients only. Learn more at www.collette.capital

Collette Capital is a Corporate Authorised Representative (CAR: 128443) of Sanlam Private Wealth (AFSL 337927), and only provides general advice.

Collette Capital advise that they and persons associated with them may have an interest in the above securities.

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