Technicals | Jul 05 2022
This story features JAMES HARDIE INDUSTRIES PLC. For more info SHARE ANALYSIS: JHX
By Michael Gable
To recap our comments from last week, the S&P500 Index remains in a downtrend, but we were looking for it to pull back and make a "higher low" in order to give us a better platform from which to trade the bounce.
The last couple of sessions in the US has seen the S&P500 Index form what looks to be a higher low and we now expect a counter-trend rally in the US and locally to develop from here. How strong that rally would be remains to be seen. The ultimate low in markets, however, is likely to still be ahead of us.
The recent easing in bond yields is a short-term positive, but further rate hikes in the US have the potential to get the markets bearish again.
Once rates are higher and central banks are able to take a pause, then markets would be set for a meaningful recovery and that would be the time to be more aggressive on the buy side. At the moment however we have a shorter-term opportunity in James Hardie Industries ((JHX)).
The overall trend for JHX is still to the downside, but it has displayed some bullish characteristics in the past couple of weeks which lends itself to a shorter-term opportunity.
After falling below $30 in mid-June, it then spent a few days moving sideways to display some good buying support before bouncing higher. Then in late June the range managed to tighten up before it gapped up again yesterday and closed near its highs of the day.
It therefore looks as though we are going to get a relief rally here in JHX. Some resistance will come in near $35, and a move through that would then have us targeting $40.
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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