Technicals | Jul 07 2020
By Michael Gable
After the sharp sell-down in the middle of June, the Australian share market is still hanging in there. The longer it does this, the more likely we get our "best case" scenario of a "flat" consolidation. This is similar to what we saw in April–May, when the market traded sideways for several weeks before it was ready to rally again. On the S&P/ASX 200 Index, a push beyond 6000 last week was encouraging, although it hasn't really followed through. Overnight we saw the S&P 500 Index push beyond the 3140 region that seemed to be offering resistance during the last month, however, it is still under the peak from early June. All of this is telling us that share markets are getting very close to start trending again.
Markets have been absorbing the noise (anything virus related), and improving economic data is providing confidence to investors to buy any dips. Our market may well have a rough few days again, but based on the resilience that we have observed during the last few weeks, that would only be a buying opportunity. This means that looking at current price action, we may not get a sharp dip. The chances of that happening have been slowly diminishing during the last several days because the market has had ample opportunity to sell-off, but it just hasn't happened. As the market continues to hold in here and settle down, the dangers that were seen in mid-June start to fade and the market becomes a safer place to start picking up some opportunities again.
In today's report, we look at Cochlear ((COH)).
COH is ready to start moving again. After consolidating sideways for the last few months, we finally saw it break higher last week (circled) on strong volume. This is now a buying opportunity and COH should continue to edge higher from here. Prices near $220 may offer some light resistance.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
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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