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Key topics and insights:
Rising geopolitical risk and energy-driven pressure on equities and bonds Australian index viewed as forming a lower high with downside risk to key support zones Strategy focused on accumulating quality tech stocks on weakness WiseTech Global (ASX:WTC), Xero (ASX:XRO), Life360 (ASX:360) and ARB Corporation (ASX:ARB) highlighted for bullish technical setups
Global tensions and an escalating energy shock are front of mind for traders on The Trade, with markets on edge over stalled Iran–US negotiations and ongoing conflict around the Strait of Hormuz. Rising oil prices and higher US and Australian bond yields are seen as tightening financial conditions, while the Australian dollar hovers around 71.8 US cents ahead of key CPI data.
Technical analyst Violeta Todorova from Leverage Shares views the local index as vulnerable after forming a lower high from the March rally, signalling weakening momentum and growing selling pressure. Todorova points to resistance around 9,000 and expects minor support near 8,600 to give way, opening scope for a decline towards 8,500 and potentially the 8,262 zone if Middle East tensions deepen. Sideways trading over coming months is seen as the best-case scenario, with a strategy of buying on weakness.
Todorova highlights several tech names showing similar bullish RSI divergences that may indicate turning points. WiseTech Global (ASX:WTC) is seen holding support near $35 with potential upside towards $53 and then $68. Xero (ASX:XRO) is viewed as basing above key support around $63, with targets of $112 and $125 once resistance near $89.50 breaks. Life360 (ASX:360) and ARB Corporation (ASX:ARB) are also flagged as constructive setups, with breaks above nearby resistance levels expected to confirm bottoms and trigger further rallies.
