Can the charts of ASX bank stocks ANZ, Commonwealth Bank, NAB and Westpac keep rising?

In Part 1 of this three-part foray into the performance, valuations, and potential future direction of ASX bank stocks, we investigated just how good their returns over the last 12 months have been. In short, they’ve been extraordinary in 2024, with several banks delivering returns many standard deviations from the mean as measured over the last decade.

In Part 2, we delved into the latest views, consensus ratings, and valuations held by the big brokers for the sector. In short, the brokers are generally bearish towards the prospects for ASX bank stocks in 2025.

In this article, we’ll conclude our in-depth analysis of the Australian banking sector with a look at their charts. I’ll be using my personal technical analysis model here, for more details on how it works, please check out my Technical analysis for beginners: ChartWatch Primer.

The outcomes for trend following technical analysts with respect to ASX bank stocks has been very different in 2024 compared to those for investors who’ve relied solely on fundamental valuations (refer to the last article for the broker experience). Generally, following the trends in the sector – or for so many Aussie investors who already own ASX bank stocks, simply trusting them – has been extremely beneficial.

For those familiar with my technical model, it's no surprise that each ASX bank stock has made regular appearances in my ChartWatch ASX Scans since I started publishing them in late-May. Here, each day, I provide readers with my favourite uptrends and downtrends, also narrowing them down into respective “Feature” lists. Features are what I consider the strongest uptrends and downtrends – i.e., my high-conviction lists.

The table below shows how many times each ASX bank stock has appeared in my Feature Uptrend list this year. “M/R” stands for most recent, as in the date and change since the chart last made Feature.

Note that CBA is the most Featured uptrend out of any ASX stock in 2024, appearing 35 times. For the most part, my trend following model captured a decent chunk of each bank’s 2024 return (consider ChartWatch only started in May, but ASX bank stocks have been rising all year). Also note that dividends paid since Featured should be added to the above returns, increasing them further.

It’s also worth pointing out that some of the banks are beginning to show negative returns since their most recent Feature. This may be a sign the trends of these ASX bank stocks could be losing momentum – but that’s the million dollar question – so let’s dive in with detailed technical analysis of each!

ANZ Group (ASX: ANZ)

Important, please note: My model only considers candles of completed trading sessions. All technical analysis below is therefore valid as of the the close of trade on Friday 6 December. Please consider that the analysis may change as new candles appear.

Trends:

• The short term trend ribbon is indicating neutral (orange trend ribbon), but given the price action is falling peaks and falling troughs and the price is trading below the short term trend ribbon, my official short term trend designation is "down".
• The long term trend ribbon is indicating up (dark green trend ribbon). Given the price remains above the long term trend ribbon and the long term ribbon appears to be acting as an area of dynamic demand (i.e., the price is bouncing out of the trend ribbon), my official long term trend designation is "up".
• Shorter versus longer term investors may take respective trends into consideration. By this, I mean a short term momentum trader may well act upon the current short term downtrend, but it is likely far less relevant to a longer term investor.

Key Levels:

• 1 Nov trough low @ 30.71 – A close below this level really solidifies the short term downtrend and likely sets up the ANZ share price for a test of the long term uptrend ribbon around 30.25.
• 4 Oct trough low @ 29.54 – A close below this level likely threatens to at the least neutralise the long term trend, but depending on the state of the long term trend ribbon, price action, and candles at the time, potentially turn it to down.
• 3 Dec peak high @ 31.87 – A close above this level is a must to steady the ship with respect to the short term trend.
• 19 Nov peak high @ 32.80 – A close above here resumes short and long term uptrends

Conclusion:

• Short term momentum is down, but there's no reason to doubt the strong long term uptrend at this stage. Given trends, candles, and price action, ANZ is unlikely to make the Uptrends list of ChartWatch ASX Scans until at least a close above 31.87.
• Watch the candles and price action at the long term uptrend ribbon closely – demand-side candles and rising peaks and troughs would be bullish, versus supply-side candles and falling peaks and troughs would be bearish.

Bendigo and Adelaide Bank (ASX: BEN)

Trends:

• The short term trend ribbon is indicating up (light green trend ribbon), the price action is rising peaks and rising troughs and the price is trading above the short term trend ribbon, therefore my official short term trend designation is "up".
• The long term trend ribbon is indicating up. Given the price remains above the long term trend ribbon and the long term ribbon appears to be acting as an area of dynamic demand, my official long term trend designation is "up".
• Both short and long term trends demonstrate strong demand-side control.

Key Levels:

• 26 Nov trough low @ 13.16 – A close below this level likely neutralises the short term uptrend.
• Bottom of the short term uptrend ribbon @ 12.97 – A close below this level likely ends the short term uptrend.
• 1 Nov trough low @ 12.05 – A close below this level likely neutralises the long term uptrend.
• 3 Dec peak high @ 13.68 – A close above here resumes short and long term uptrends

Conclusion:

• Recent price action suggest the short term uptrend is losing some momentum, but the candles are mixed at worst – suggesting there's little reason to doubt the demand-side remains in control in the short term. The long term uptrend is showing very strong momentum.
• A return to demand-side candles and a quick close above the key point of supply at 13.68 would resume a very strong technical picture here – arguably the strongest along with CBA among the group – and earn BEN another Feature in the Uptrends list of ChartWatch ASX Scans.
• Watch the candles and price action at the short term uptrend ribbon closely – demand-side candles and rising peaks and troughs would be bullish, versus supply-side candles and falling peaks and troughs would be bearish and will likely signal an end of the short term uptrend.

Bank of Queensland (ASX: BOQ)

Trends:

• The short term trend ribbon is indicating up, the price action is rising peaks and rising troughs, and the price is trading above the short term trend ribbon, therefore my official short term trend designation is "up".
• The long term trend ribbon is indicating up. Given the price remains above the long term trend ribbon and the long term ribbon appears to be acting as an area of dynamic demand, my official long term trend designation is "up".
• Both short and long term trends demonstrate strong demand-side control.

Key Levels:

• 20 Nov trough low @ 6.75 – A close below this level likely neutralises the short term uptrend.
• 1 Nov trough low @ 6.40 – A close below this level likely neutralises the long term uptrend.
• 5 Dec peak high @ 7.05 – A close above here resumes short and long term uptrends.
• 21 Oct peak high @ 7.07 – This is a key point of supply, a close above this level is critical to continuing the long term uptrend.

Conclusion:

• There is clearly some latent supply working in the market around the 21 Oct peak of 7.07, but trends, candles, and price action generally remain intact, suggesting no reason to doubt the demand-side is firmly in control of the BOQ price.
• A close above 7.05 with a strong demand-side candle would likely earn BOQ another Feature in the Uptrends list of ChartWatch ASX Scans.
• Watch the candles and price action at the short term uptrend ribbon closely – demand-side candles and rising peaks and troughs would be bullish, versus supply-side candles and falling peaks and troughs would be bearish and will likely signal an end of the short term uptrend.

Commonwealth Bank of Australia (ASX: CBA)

Trends:

• The short term trend ribbon is indicating up and the price is trading above the short term trend ribbon, but the price action is falling peaks and falling troughs. Given peaks and troughs are tightly grouped, I am comfortable retaining an official short term designation of "up" for now.
• The long term trend ribbon is indicating up. Given the price remains above the long term trend ribbon and the long term ribbon appears to be acting as an area of dynamic demand, my official long term trend designation is "up".
• The short term trend is losing some momentum, but the long term trend continues to demonstrate strong overall demand-side control.

Key Levels:

• 26 Nov trough low @ 154.10 – A close below this level likely neutralises the short term uptrend.
• Bottom of the short term uptrend ribbon @ 155.95 – A close below this level likely ends the short term uptrend.
• 25 Nov peak high @ 160.27 – A close above here resumes short and long term uptrends

Conclusion:

• Recent price action suggests the short term uptrend is losing some momentum and the 26 Nov long black candle is a credible supply-side showing. A close below the low of that candle (154.10) likely neutralises the short term trend.
• A return to demand-side candles and a quick close above the key point of supply at 160.27 would resume a very strong technical picture here – arguably the strongest along with BEN among this group – and earn CBA another Feature in the Uptrends list of ChartWatch ASX Scans.
• Watch the candles and price action at the short term uptrend ribbon closely – demand-side candles and rising peaks and troughs would be bullish, versus supply-side candles and falling peaks and troughs would be bearish and will likely signal an end of the short term uptrend.

National Australia Bank (ASX: NAB)

Trends:

• The short term trend ribbon is indicating neutral, but given the price action is falling peaks and falling troughs and the price is trading below the short term trend ribbon, my official short term trend designation is "down".
• The long term trend ribbon is indicating up. Given the price remains above the long term trend ribbon and the long term ribbon appears to be acting as an area of dynamic demand (i.e., the price is bouncing out of the trend ribbon), my official long term trend designation is "up".
• Shorter versus longer term investors may take respective trends into consideration.

Key Levels:

• 1 Nov trough low @ 37.93 / 7 & 13 Nov lows @ 37.91 – A cluster of points of demand make this a particularly critical level. A close below it really solidifies the short term downtrend and likely sets up the NAB share price for a test of the long term uptrend ribbon around 37.30.
• 4 Oct trough low @ 36.38 – A close below this level likely threatens to at the least neutralise the long term trend, but depending on the state of the long term trend ribbon, price action, and candles at the time, potentially turn it to down.
• 3 Dec peak high @ 39.96 – A close above this level is a must to steady the ship with respect to the short term trend.
• 25 Nov peak high @ 40.27 – A close above here resumes short and long term uptrends

Conclusion:

• Short term momentum is down, but there's no reason to doubt the strong long term uptrend at this stage. Given trends, candles, and price action, NAB is unlikely to make the Uptrends list of ChartWatch ASX Scans until at least a close above 39.96.
• Watch the candles and price action at the long term uptrend ribbon closely – demand-side candles and rising peaks and troughs would be bullish, versus supply-side candles and falling peaks and troughs would be bearish.

Westpac Banking Corporation (ASX: WBC)

Trends:

• The short term trend ribbon is indicating up, but given the price is no longer trading above the short term trend ribbon and the price action is rising peaks but falling troughs, my official short term trend designation is "neutral".
• The long term trend ribbon is indicating up. Given the price remains above the long term trend ribbon and the long term ribbon appears to be acting as an area of dynamic demand, my official long term trend designation is "up".
• The short term trend is losing some momentum, but the long term trend continues to demonstrate strong overall demand-side control.

Key Levels:

• Bottom of the short term uptrend ribbon @ 32.70 – A close below this level likely ends the short term uptrend.
• 7 Nov trough low @ 31.12 – The short term trend has well and truly swung to down on a close below this level.
• 3 Dec peak high @ 34.00 – A close above here resumes short and long term uptrends.

Conclusion:

• Short term momentum is neutralised, but it wouldn't take a great deal to swing it back to up. Candles here are therefore crucial – demand-side candles and rising peaks and troughs would be bullish, versus supply-side candles and falling peaks and troughs would be bearish and will likely signal an end of the short term uptrend.
• A close above 34.00 with a strong demand-side candle would likely earn WBC another Feature in the Uptrends list of ChartWatch ASX Scans.

Want to know more about technical analysis and some of the jargon used here (for example, what is a "demand-side candle"!)? Be sure to check out my Technical analysis for beginners: ChartWatch Primer.

This article first appeared on Market Index on Monday 9 November 2024.