Bank Reversal

This story features NATIONAL AUSTRALIA BANK LIMITED. For more info SHARE ANALYSIS: NAB

By Michael Gable 

US markets in the last week have gone back to making only small moves each day which saw the VIX reach its lowest point since February 2007. The Australian share market has seen a bit more movement in the last week, and the main talking point was the unspectacular bank results. The Australian dollar (which we have been negative on) has also fallen. The combination of the two, in our opinion, has led to some dumping of bank shares by overseas investors.

When the Australian dollar is going down, and the banks have reached the upper end of their historical valuations, then foreign money is more likely to be a seller than a buyer of the Australian market. We have a chart of National Bank ((NAB)) in today's report to show you the key levels (the other banks are in a similar position).

 

 

The weekly chart here shows a reversal on the chart (circled). May is also historically weak for the banks, so we expect NAB to come back towards some obvious support near $30 which is also the 38.2% retracement of the recent rally. If that cannot hold then there is strong support at $29.
 

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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