article 3 months old

Woolies Downside Limited

Technicals | Mar 03 2015

This story features WOOLWORTHS GROUP LIMITED. For more info SHARE ANALYSIS: WOW

By Michael Gable 

The market continues higher although with less gusto compared to a month ago. A lot of it is predicated on another interest rate cut, but if that doesn’t happen today, could it be a situation of buy the rumour sell the fact? A short term correction is needed to take some heat out, although the market still looks bullish medium to longer term. Today’s report includes an opinion on the charts for Woolworths ((WOW)).
 

We have tracked the highs and lows of WOW every now and then, and last week’s sell-off now makes it clear that we are in a 5th wave. That is, from its peak in May last year, WOW has almost completed a 5 wave decline. We are currently within the 5th wave which implies that, despite what the pundits are saying, further downside is limited from here. WOW is likely to head back under $29, possibly as low as $28 before finding support. It will be also interesting to note whether price diverges with the RSI as the stock finds a new low. From there we would be interested in WOW on the long side. As it may not bounce too sharply from there, one suggested strategy would be a bull put spread using options.
 

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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For more info SHARE ANALYSIS: WOW - WOOLWORTHS GROUP LIMITED