Technicals | Feb 14 2017
By Michael Gable
Markets have had a positive few days on the back of Trump saying that he is going to announce a "phenomenal" tax plan. The S&P/ASX 200 Index has bounced off support near 5600 but we would be wary of it being a "b" wave within a larger "a-b-c" correction. This means that we should still expect to see lower levels in the short term. But spending a couple of months consolidating against a 2-month rally is healthy and that makes the next rally more sustainable.
The market wasn't too excited about NAB's recent quarterly results and nor was it happy with yesterday's half yearly from BEN. With CBA reporting tomorrow, expectations are running a little low. We are still finding the best opportunities in the mid-tier stocks, and materials in particular. When reporting season is over we will have a selection of investment grade opportunities. Today we run the ruler over Premier Investments ((PMV)).
At the beginning of last week, PMV looked to be in danger as it broke under support near $13 and risked falling towards the next level down at $12. The unscheduled announcement last week which alleviated the market's concerns saw the stock bounce back towards $14. This caused a "bullish engulfing pattern" to form on the weekly chart (circled). So, PMV has gone from being nearly on its death bed to being resurrected again. We can see the potential for it to ease back towards the low to mid $13's, but as long as it can hold there, then we should see it trend higher over the next several weeks. Any movement back to those levels is a chance to get back in, but we don't want to see it come back towards those sub $13 levels again. There should be some resistance near $14.50 but we would be targeting levels closer to $15.50.
Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.
Michael is RG146 Accredited and holds the following formal qualifications:
• Bachelor of Engineering, Hons. (University of Sydney)
• Bachelor of Commerce (University of Sydney)
• Diploma of Mortgage Lending (Finsia)
• Diploma of Financial Services [Financial Planning] (Finsia)
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2
Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
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