ResMed Pullback Complete

This story features RESMED INC. For more info SHARE ANALYSIS: RMD

By Michael Gable 

We have a short week here and volumes are expected to be light. Even though it’s a quiet week, we have still uncovered a couple of opportunities.

ResMed ((RMD)) is one that we have been patiently keeping an eye on, looking for a buy signal. The company generates 60% margins and a 15% ROA (return on asset) and is leveraged to the burgeoning rise of sleep related disorders associated with higher obesity rates in the developed world. We finally spotted something very promising on the charts here.
 

ResMed

We’ve looked at RMD a couple of times in the last 6 months. On 5 November we warned of a drop in the share price to under $4.80. Then a month ago we highlighted the fact that it was still in the downtrend. Although it was looking good, there was never any rush to get in. Now we have finally seen RMD break the downtrend. We have circled this break on the chart. Now that the shorter term downtrend is broken, it should resume the longer term uptrend, which implies levels up towards $6. Before then, we expect some strong resistance between $5.60 – $5.80.

[RMD will report its quarterly result on Thursday.]
 

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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