article 3 months old

Opportunity In Commonwealth Bank

Technicals | Jan 28 2020

By Michael Gable 

Uncertainty over the economic effects of the coronavirus will weigh on markets for this week. However, even if our market were to fall, say, 200 points from here, it still would look fine on a technical basis. We have made some great progress since the start of the year, so it's natural to get a dip along the way. It seems like the market was looking for an excuse. At the moment the effects of this virus are uncertain, and it is the uncertainty that gets investors worried. But a likely scenario to play out is that the spread of the virus starts to plateau, the Chinese government indicates that it will inject stimulus into their economy, global growth remains on track, and investors go back to focusing on the upcoming domestic reporting season. Things can get out of hand before they turn, so it would be prudent to keep a close eye on the price action in the next few days.

For this week's report our charting section provides an update on the chart of Commonwealth Bank ((CBA)).

CBA had spent the last six months consolidating in a triangular pattern. It has now broken free of that and should trend higher again. There will be some resistance near $87, but because it consolidated for such a long period of time, it is likely to get through $87 fairly quickly and attempt a retest of $90 before we need to reassess. Current levels are therefore a buying opportunity.

Content included in this article is not by association the view of FNArena (see our disclaimer).
Michael Gable is managing Director of  Fairmont Equities (

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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