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Break-Out For Reliance

Technicals | Oct 22 2019

This story features RELIANCE WORLDWIDE CORP. LIMITED. For more info SHARE ANALYSIS: RWC

By Michael Gable 

The Australian share market is still in the middle of its recent trading range, but the S&P 500 Index in the US is looking more and more as though it wants to break higher. This is despite all the bearishness that has been thrown at it during the last couple of months. With everyone predicting a recession, of course the opposite is what usually happens. We can't all spend next year flogging books and newsletters on how we all predicted the recession of 2019 because of, as my barber tried to explain it several weeks ago, "some upside-down curve thing". It's the classic taxi driver contrarian indicator. 

Just as those who told you to "sell in May" got it wrong, those predicting that September/October would be another cyclically poor time of the year for share markets may well be covering their costly short positions sometime soon. We will probably know in the next few days whether the US is ready to break higher or not. Until then we just need to trade the range at the stock specific level. 

In this week's report we have looked at an investment opportunity in Reliance Worldwide ((RWC)).

RWC has traded well since the August lows. Most recently it has spent the last few weeks consolidating sideways in a flag formation. The last few days has seen it break out of this flag and it is now ready to head higher again. Initially, we should see a bit of resistance as it fills the May gap near $4.60. 

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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For more info SHARE ANALYSIS: RWC - RELIANCE WORLDWIDE CORP. LIMITED