Technicals | May 21 2019
By Michael Gable
Last week in our introduction, we mentioned the need to be ready to take advantage of the dips as we were still positive on the overall picture for markets. The week before that we suggested that you shouldn't necessarily sell in May and go away. So far this month the S&P/ASX 200 Index is up about 150 points. We have been bullish on the market all year and yesterday saw it reach a 12-year high. During the last several weeks we have generally seen a rotation out of material stocks (except iron ore of course) and a move back into growth companies. The election result has seen fully franked stocks catch a bid and this might add another dynamic to fund flows in the Australian market.
For this week however, we have analysed Xero ((XRO)).
Our prior analysis was on 19 March when XRO was trading at $49.35 and we advised that XRO should push to a new high. Because of our experience in trading XRO well in the past, we commented that "when XRO goes on to make new highs, it tends to see a lot more buying step in. This means that clearing that resistance level could see it quickly put on a few more dollars." The gap-up last week was on good volume and as long as XRO holds on here, it should be able to edge higher. A break of $58.00 would indicate that it might spend more time consolidating and that would be a sign for traders to take profits and to wait for better levels to re-enter.
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
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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