Technicals | Sep 04 2018
By Michael Gable
We leave the month of August having now seen most companies post their full year results. As of yesterday, we had about 28.3% of companies beat expectations, 47.2% were in-line, and 24.4% missed (numbers courtesy of FNArena). Overall it wasn't too bad, but once again, those that missed were severely punished, and those that did OK continue to see endless buying. The gaps between the two, from a P/E perspective, continue to widen and the market still seems very comfortable in paying up for quality.
Commodity stocks as we all well know have their ups and downs and August was clearly a "down" for the sector. First, we had concerns around emerging markets with the dramatic drop in the Turkish Lira and the rally of the US dollar, followed by on-going trade tensions between the US and the rest of the world. As deals get done, and tensions ease, a sharp bounce back will be inevitable, and therefore represent another buying opportunity in the commodities space.
This week's report looks at the chart of DuluxGroup ((DLX)).
We have previously highlighted the ascending triangle which is forming for DLX. The last few weeks has seen it once again bounce up from $7.50 and now it is testing resistance near $8. We remain neutral on the chart until it can close above $8, at which point the chart becomes very bullish. But with the range tightening up, it is worth putting on your watchlist, as we might only be days away from a breakout.
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
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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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