Telstra Breaks Support

Technicals | Apr 18 2017

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By Michael Gable 

The next couple of weeks will be interesting as the US heads into reporting season. The bar has been set pretty high over there and it makes you wonder what could drive it higher in the short term. US indices have broken their 50-day moving average and investors would be looking for further clues as to whether we are now about to enter a healthy consolidation.

In light of the hand grenade thrown into the Telecommunications sector last week from TPG, this week we take another look at the chart of Telstra Corporation ((TLS)).

 

We have been accurately tracking the TLS chart over the last 12 months. In March 2016 we anticipated a rally from the low $5's towards $5.60. Then in August we warned of a dip back under $5, and our most recent commentary on TLS was in February when we warned that levels closer to $4.50 would be seen. TLS has now gone through that target and is sitting near $4.16. We can see on this monthly chart that the stock has now retraced 61.8% of the 2010 – 2015 rally. This area should lend some support for TLS and it may try to trade higher here in the short term. Beyond that we can't be too certain that it won't head under $4, hence our neutral stance on it right now.

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

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

Disclaimer

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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