Technicals | Nov 15 2022
This story features CHARTER HALL GROUP. For more info SHARE ANALYSIS: CHC
By Michael Gable
What a difference a day makes, or even a week. A positive surprise in US CPI has ensured that the relief rally in markets continues on.
However, the Australian market has had the extra benefit of China starting to ease some covid restrictions, which has sent a rocket under resource stocks.
Our observation a week ago was that despite all the bearish commentary on resources, we could see that proper money was pouring back into the major miners and energy stocks and that they were a buying opportunity. That upside looks set to continue for now.
We have spoken about being most of the way through this bear market, and last week's US CPI is now giving us the light at the end of the tunnel.
It is only one data point, but it means we now have more certainty around where inflation is heading, which means we have a bit more certainty on what interest rates will do, and therefore when markets will have bottomed.
Don't worry about recession, we all know that it is coming and markets bottom at the start, not the end, of a recession. The next few months will remain volatile as we get the last couple of rate rises out of the way, but the overall environment to trade is now looking a bit easier than what we had only a few weeks or so ago.
In this week's report, we have a chart on Charter Hall Group ((CHC)).
After halving in price in the first half of this year, CHC now appears to have formed a base and is ready to get moving higher again.
There was a clear line of resistance near $13.50 which it broke above on Friday with good volume. It is now back to retest that level.
Ideally, we want to see it hold this level and that would be a buying opportunity. Any short-term weakness needs to be contained to the next resistance line down which is near $12.70.
Further up from here though, we can see resistance levels near $15, $16, and then $17.
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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