Technicals | Mar 02 2021
This story features BABY BUNTING GROUP LIMITED. For more info SHARE ANALYSIS: BBN
By Michael Gable
We have been cautious on the S&P/ASX 200 Index for about a month now. Last week we commented on the lack of momentum and that the index could be weighed down in the short term. After smashing under the 50-day moving average last Friday, our market managed to stage a rally yesterday and by the end of today could well be back to where it was last Thursday. It hasn't fallen yet, but we have still essentially made no progress since December.
Bond yields edging higher are the result of a booming economy and increased company earnings. It is a good sign. Over the course of the year, money exiting bonds will find a home in equities in order to get exposure to the growing economy. However, the share market is a measure of emotions. Although it should be higher by year end, there is no reason why the human participants don't get scared by rising rates and drive the market lower before then. Yes, a slight increase in rates can affect stock market values, but it is not the only determinant.
Volatility during the last few weeks is telling us that the fear factor is very real and this is why, over the short-term, we need to be prepared for some potentially lower levels in the index. Most people claim to be longer-term investors, yet they can't help be fearful of short-term price movements. It is what it is, and for now the risks of short-term weakness is still very real.
Having said all that, there are still opportunities to consider. In this week's report, we have a look at Baby Bunting Group ((BBN)).
We can see that over the last few weeks, the daily ranges have increased and this implies a bit of extra risk to the short term. BBN appears to have made a lower high and this means that we could be seeing the share price start to consolidate here. At the moment we can be patient and wait for lower levels. There is strong support near $5.00, so if that was to break, then we could potentially see a dip back towards $4.50.
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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