Technicals | Sep 30 2014
By Michael Gable
It was encouraging last week to see US second quarter GDP growth hit 4.6%, the fastest rise in 2 years. Domestically, it is still all about the currency as signs of rallies quickly fade as the market remains soft. Woodside Petroleum (WPL) is at an interesting technical level so those wishing to trade WPL should keep an eye on it over coming days.
WPL spent several weeks across 2013 – 2014 trading in a band between about $37 and $39.50. Because it was stuck in a range for so long, it meant that the eventual breakout was fairly powerful. As a result, the breakout seen in April this year saw the share price of WPL rally up to over $44. The share price is now clearly coming back but potentially we are close to a low now. The share price has become oversold on the daily chart but on this weekly chart we can see that it is very close to retesting that prior breakout zone around $39.50. It may not necessarily go that low but a reversal from around those levels would be viewed as very bullish. If that were to occur, we could expect to see WPL retest this year’s high. A breach of that would suggest levels as high as $46. On the downside, we don’t want to see WPL dip back under that $39.50 level, so traders would consider stops around that point.
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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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