Technicals | Jun 30 2015
By Michael Gable
There is enough literature out there on Greece, so there is no point rehashing it all. Putting that aside, all we can continue to do is look beyond the macro issues and know that markets will want to rally when we get past it, as they have done before. The situation may be different, but human nature is always the same. When markets inevitably rally, what should we be looking at? Generally it is the larger cap stocks that rally first. If you are a fund manager looking to go long Australia, you need to buy the big names.
Those stocks are also more liquid so it is “easier” to get a better price than trying to buy a small cap stock which causes you to only push up the price even more. So keep an eye on the big cap stocks. We have already written about big names going ex dividend soon such as Commonwealth Bank and Telstra, so expect those stocks to not only hold up well here (relatively speaking), but move very nicely when markets recover. Having said that, we can see a few big cap names which we don’t think will do as well when the market recovers.
One of those is Woodside Petroleum ((WPL)).
We have not been a fan of further investment in the energy sector for several months now. We can see that WPL has generally tracked sideways since the beginning of the year. Is it base building or is this merely a continuation pattern since the downtrend started last year? The stock is down near the bottom of the range so investors should keep an eye on whether there is a break to the downside here. If so, then WPL could continue its downtrend and find major support at $30.
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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
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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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