Technicals | Dec 20 2022
This story features NICK SCALI LIMITED. For more info SHARE ANALYSIS: NCK
By Michael Gable
It has a been a big week for financial markets. US CPI came in well under expectations, and the US Federal Reserve raised rates in line with expectations. The CPI numbers further confirm that inflation is heading the right way, which is good for interest rates, the economy, and share markets. However, the commentary from US Fed officials seems to be at odds with the actual data, with the so-called "dot plots" showing a higher rate next year compared to the terminal rate noted back in September. We say that the commentary is at odds with the data because back in September, inflation was still out of control. The tactic of talking down the market's enthusiasm, even though it is contrary to the actual data, seems to be working.
The S&P 500 Index has been having a rough few days trying to deal with this hawkishness and breaking under support at 3900 now looks like we are in for a soft end to the year. It is fitting that the worst market since the GFC in 2008 is set to end on a whimper, but that is how it is at the moment. The resource sector seems to be only game in town at the moment while everything else eases back with the market.
But this week have a look at Nick Scali ((NCK)).
After rallying strongly in late November, NCK hit the August high before falling back. However, we can see that instead of falling back sharply, it is merely easing back in a flag formation on lower volumes. This is potentially a positive and it means that NCK is one to keep an eye on for a possible buy trigger. A strong day and a push beyond $11.50 would be the sign that it is ready to head higher again. However, if we see it continue to slide to the low $10's, then the overall pattern is not as bullish anymore.
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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