South32: Heading North

This story features SOUTH32 LIMITED. For more info SHARE ANALYSIS: S32

By Michael Gable 

Volatility has picked up again and it is clear that the concern is not covid anymore, it is what central banks will do to interest rates and liquidity. Tech and high P/E growth stocks will remain under pressure for now and resources and banks appear to be a good safe haven. The ASX200 Index is back to retesting 7200. It is a level that everyone is watching, so if (when) it breaks, the move down will be swift.

For the moment though, it looks like the downtrend that started in August will have the odd rally along the way but the overall direction for the market over the next few months or so appears to be flat or slightly down as liquidity gets sucked out of the system. There will be money to be made in the right stocks, but it will be more of a trader's market. The "buy anything" strategy, from late last year to early this year, is clearly over.

In today's research, we have a chart on South32 ((S32)).

After breaking out in August and rallying strongly in September and October, S32 then needed to consolidate. It fell back at the end of October and then bottomed out during November. The last few days has seen it break higher and it now looks like we will get a rally here in S32. Current levels are a buying opportunity. If S32 were to fall back under the breakout line, then we would prefer to see it hold $3.50. Naturally some resistance will kick in near $4.

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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