The ASX200 Index Has Returned to a Key Supply Zone

We'll be looking at the ASX200 on a daily basis starting today. A crucial supply sector has seen a price increase. Will this be the start of a new uptrend, or will it be a push for new highs?

The ASX200 has pieced together three months of excellent performance after a difficult start to 2022. In January, the price dropped 6.81 percent until purchasers seized control and added about 8% to the present level in April. Buyers have contributed 1% to the market so far this week.

We've now returned to a vital supply point. We've seen two major trend reversals between 7590 and 7640 after price has reached this level. The first rejection was on August 13, 2021, and the most recent was on January 4, 2019, resulting in a 9% decrease.

A robust medium-term surge that started in March is helping buyers. Earlier this month, buyers broke free from consolidation, clearing the stage for a new push back to the supply side. Will this rally come to a finish with a break and close above 7640-7652, setting a new high? Because it is so close to all-time highs, the ASX has a considerable lead above US indexes. Despite worries about inflation and fiscal policy, stock indexes in the United States are increasing. Their current momentum might be just what ASX investors need to take the next step forward. As a result of the RBA's past hints at higher rates, Australian inflation is rising, but it does not seem to be causing too much anxiety in the short term.

We'll be watching to see whether buyers can keep pushing higher or if sellers flood back in, putting pressure on the supply area.