Technicals | Sep 10 2019
By Michael Gable
We noted last week that the US share market was looking a bit more positive and that we would know within a few days what the next move would be. We finally got that confirmation last week, so in today’s report we have an updated chart of the S&P 500 Index. At the end of last year, the Australian market fell nearly 15%, so despite the huge volatility seen in August, for the moment we thankfully appear to be avoiding that situation again.
The other observation of ours is that energy stocks are finding some very good buying support, despite the price of oil not making much headway yet. This could be a sign that early positioning is underway in these stocks and an indicator of what might be around the corner for the energy sector, a sector which has been very unloved recently. As a result, in today’s report we have a chart on Santos ((STO)).
We had a look at STO on 27 August and noted that it was a stock worth watching. We advised at the time “STO continues to form a bullish pattern on the chart. The rally in the first part of this year saw the stock head back up to retest the 2018 high. Instead of being sold down heavily, it has formed a flag underneath the old high. This is often a bullish sign as any selling here is met with decent enough buying that the share price cannot head much lower. Once the weakness is out of the way, it should be ready to break the 2018 high. If that were to occur, then we would see a very strong rally from STO.”
We are now seeing signs of STO breaking this flag. It now looks like a buying opportunity. A breach of the 2018 high will provide us with further confidence that we are about to see a decent rally in the STO share price.
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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