Technicals | Jan 21 2020
Michael Gable of Fairmont Equities suggests higher highs are coming for the Fortescue Metals' share price.
By Michael Gable
It was interesting to read overnight that the International Monetary Fund (IMF) has seen tentative signs of a bottoming out in global manufacturing and trade.
This is what we wrote about in our August 2019 update and then again last month in our 2020 Market Outlook. This is why we have been bullish on the share market for months now and suggesting that investors buy the dips, not sell the rallies.
It is why growth stocks and resource stocks such as CSL, BHP Group, Rio Tinto, and Woodside Petroleum have been trending higher and outperforming the share market during the last few months. It is another example of why waiting for institutions like the IMF to tell you everything is OK, and waiting for all your ducks to line up usually results in investors getting in too late and underperforming.
Luckily, we still believe that we are only seeing the start of a move, not the end of it. Although markets in the short-term look hot and can be forgiven for cooling off a little, we don't see a big move lower from here. The uptrend in the Australian market has much further to run over the coming months.
A Technical Analysts' View On Fortescue Metals ((FMG))
Although FMG has risen by a fantastic amount in the last year, the uptrend has remained sustainable. It tends to rally for a few weeks quite quickly and then spend some time consolidating that move by drifting sideways.
Most recently, we have seen it hug the underneath of $11.00 before breaking higher last Friday and following through yesterday. FMG is therefore resuming the uptrend and should continue to head higher again. Stop losses should be considered nearby under the old of low of $10.50.
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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