ASX200: Upside Risk Favoured

This story features BHP GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: BHP

By Michael Gable 

The Australian share market has bounced well after the dip from mid last week.

As we noted in last week's report, sentiment around resources and iron ore, in our opinion, resembles the peak bearishness from November 2022.

That led to a big turnaround in the miners. As we saw last week, the miners were dumped in the middle of the week, only to recover strongly. This could therefore be the start of a new move higher and we still remain positive on the major miners right here.

So to reiterate, some of our recent picks, stocks such as BHP Group ((BHP)), Fortescue Metals ((FMG)), Rio Tinto ((RIO)), Lynas Rare Earths ((LYC)), Sandfire Resources ((SFR)) and Worley ((WOR)) still remain at attractive buy levels.

US markets continue to trend well for now, but because of recent weakness in the miners, the Australian market has under-performed these past several weeks. Today's report has a chart of the S&P/ASX 200 Index to highlight what we are seeing at the moment.

The index has formed a bull-flag after peaking in mid-April. It may hug the underneath of the upper blue line for a couple of days, but the most likely move after that is an upside break.

That is, a daily close up over about 7250 would signify the start of the next run higher. That should lead to a retest of the 7500 – 7600 area.

A downside break under 7100, however, would have us targeting levels back near 6950.

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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