Hot momentum in the small end of town | the trade

Описание: Louise Bedford from Trading Game pinpoints strong opportunities in the market, identifying the smaller end of the ASX as the standout performer. Bedford describes volatility in the All Ordinaries (ASX:XAO) as low, which currently benefits traders seeking smoother exits. While the broader indices such as the ASX20, ASX100, and ASX300 are regarded as ‘cold’, Bedford highlights that money is shifting towards smaller capitalisation stocks, making the small ordinaries, small industrials, and small resources sectors the hottest right now.

According to Bedford, technical charts indicate that the small ordinaries index is trending favourably, despite potential hesitation for traders to buy at all-time highs. She references a strong relative strength comparison and candle patterns in small industrials, emphasising a bullish “rising three” continuation pattern. The small resources sector is considered even stronger, displaying dominance in price action and attractive gaps for tactical trading.

Looking overseas, Bedford views the S&P 500 ($SPX) as maintaining a bullish trend with higher highs, outpacing the Australian market on relative strength. However, she states the Nasdaq ($NDX) is even hotter, with the index outperforming the S&P 500, accompanied by historically low volatility, suggesting index-based investments or ETFs are compelling choices this week.