Technicals | Mar 22 2022
This story features WESFARMERS LIMITED. For more info SHARE ANALYSIS: WES
By Michael Gable
In our report last week, we commented on the S&P500 Index getting close to some sort of resolution. It needed to break the downtrend line, or give us one final capitulation.
Given the bullish divergence that we highlighted last week, the S&P500 followed the most likely route, which was an upside break through the downtrend line. We may get some sideways consolidation here for a few days, but the overall picture for markets has now flipped to being positive and we would expect a recovery from here.
Today's report has analysis of Wesfarmers ((WES)).
We reviewed the WES chart three weeks ago and made the following comment at the time: "WES has now retraced nearly 50% of the 2020 – 2021 rally. Forty eight dollars is an obvious support level where it now appears as though WES is finding a base and good volumes are coming back into the stock. We also have some bullish divergence on the daily RSI (diagonal lines). There is therefore a strong chance that this is either the low or very close to the low for WES and we expect a recovery from here in the share price. Current levels are a buying opportunity."
Since then, we have continued to see WES edge higher. In the last few days, it has also pushed beyond resistance near $50. We are therefore still confident that a low is in place for WES. For now, it might just ease sideways in the short term before it is ready to push higher again.
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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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