Santos On The Move

This story features SANTOS LIMITED. For more info SHARE ANALYSIS: STO

By Michael Gable 

Overnight events have seen Gold rally above the long-term downtrend line, hitting US$1310/oz. If it can hold here, then we should see some decent upside. In the last two weeks, we have had charts of Evolution Mining (EVN), Northern Star Resources (NST), and St Barbara (SBM) in preparation of a breakout. It is worth revisiting these to ensure you have some sort of gold exposure in the portfolio.

Reporting season here in Australia is heading towards the tail end now, and whilst it was good on balance, it doesn't seem enough to push the Australian market above its trading range. With the US markets having likely peaked in our opinion, this means that risk for the Australian market continues to exist to the downside. We continue to believe that the banks have peaked in the short term and selling in the banks is likely to be the catalyst to drag the market under support. Today's report covers Santos ((STO)).
 

From the low in January 2016, STO made a quick rally, reaching over $5 in August of that year. It then eased back for nearly 12 months, creating a large 3-wave decline to form a "higher low". STO finally broke the downtrend last week on high volume. This means that STO should now rally higher. In terms of a target, it is likely to make a move equal in size to the rally from early 2016. That is, we could see it head towards $5.50. Traders should look to exit if the stock moves back under the downtrend line.
 

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)

Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services. 

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

Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). 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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