Has Cochlear Selling Run Its Course?

This story features QBE INSURANCE GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: QBE

By Michael Gable 

With the US Federal Reserve appearing to be in no rush to taper their Quantitative Easing (consensus is at least March next year), the market can enjoy the money printing drug for a little longer. How soon before tapering starts will the markets start to undergo profit taking? It is impossible to answer with many nervous fingers still on the sell trigger ready to go. But what we cannot deny is the fact that markets are trending up and we need to stick with it. You will notice that many of the stocks in our model portfolio are under their 52 week highs so although the market is soaring, there are still plenty of stocks which have a lot of further upside. We have also analysed the takeover offer for Warrnambool Cheese ((WCB)) and you will be very surprised how high the takeover price could escalate to.

The RBA releases the minutes today from its November meeting and we would like to see some sort of excuse for the Australian dollar to weaken further. It will do wonders for our market, and will continue to help some of our favourite stocks continue to trend higher such as QBE Insurance ((QBE)), Computershare ((CPU)), and Incitec Pivot ((IPL)). In this week’s report we have identified more stocks on the move and others worth keeping a close eye on.
 

Cochlear ((COH))

COH is very much a trading stock at the moment as the fundamentals are still uncertain and it suffers from immensely volatile swings in the share price. The stock seems to be doing a bit of work down at these levels and is starting to suggest that we have seen a low in place for 2013. It is still too early to buy with confidence but it is worth keeping an eye on it. On our weekly chart we can see that the low in June came in on very large volume so perhaps we have seen the last of the big sellers. After rallying very quickly from that point, the share price has been drifting back and using up a lot more time to try and retest those lows. We can also see our Relative Strength Index trending up out of oversold territory. This absence to major selling is a positive sign, but until we see some good buying come back in, we will maintain a neutral recommendation. If we see a weekly close above $61.50 (indicated by the horizontal blue line), then it would suggest the pullback is over and traders can jump on board and ride the positive momentum.
 

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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