Time To Buy The Banks

This story features COMMONWEALTH BANK OF AUSTRALIA. For more info SHARE ANALYSIS: CBA

By Michael Gable 

After retesting the February lows, the S&P 500 Index appears to be forming a double bottom within a long-term uptrend, which is actually quite bullish. It is early days yet but worth considering. The S&P/ASX 200 Index has also been quite robust this last week. Not only that, but after we've been calling lower levels for banks stocks for a number of months, they have fallen into our downside targets and appear poised to rally. So, is it time to buy the big 4 banks right now? Yes, it is. When you combine a rally in the banks with a strong showing from other majors such as BHP, WPL, RHC, CSL etc, you suddenly have a market that is heading higher. That then leads to renewed confidence from investors.

We take a look at Commonwealth Bank ((CBA)).

CBA has fallen back towards the lows last seen in 2015 – 2016. It then reversed off that last week, forming a bullish engulfing pattern on the weekly chart (circled). This is therefore a buying opportunity for CBA. We are incorrect if the shares trade back under last week's low of $71.45. If we are correct though, then CBA should first find resistance near the downtrend line which is just under $78.

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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