Santos: Upside Break

This story features SANTOS LIMITED. For more info SHARE ANALYSIS: STO

By Michael Gable 

Monday saw the lowest volumes all year for the Australian share market, which shows the level of uncertainty out there. Overnight in the US, the S&P500 Index tried to rally but it closed near its lows of the day.

The S&P500 has made no progress in the past week, and it continues to sit right under resistance near 4200. It will either burst through it and try to add another 5%, or we will see it take another leg down from here and perhaps make a new low for the year.

Clearly, with the trading ranges being fairly tight these past few days, a large move in either direction will be the signal that that is the path markets will want to take next. I expect a decent move to happen at some point this week.

Our charting commentary this week has identified breakouts in some energy stocks, including Santos ((STO)).

Our comment two weeks ago was to look for an upside break above $8.40. After forming an ascending triangle since March, STO in the past two days has finally broken to the upside (circled).

This is a clear buy signal as STO should resume the uptrend from here. Very tight stops can be considered just under $8.40 in the event that the breakout fails due to market weakness.

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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