JB Hi-Fi hits our downside support level

Video: Is Mantra poised to rally 20 per cent?
June 5, 2017
Tax Time: What You Need to Know About Capital Gains Tax and Shares
June 7, 2017
Show all

We looked at JB Hi-Fi (JBH) last year and didn’t like the way the chart looked. We expected the shares to fall towards support near $22. Since our note, Amazon has been in the papers nearly every day and investors headed for the exit. The stock is now down over 15% since our warning. In comparison, the ASX200 has climbed higher and higher during that time. With the stock hitting our downside target, is it time to go against the Amazon hysteria and step back into JB Hi-Fi?

Two weeks ago we saw it trade intraday at $21.92. Now we have seen JB Hi-Fi bounce from that level. This area sees JB Hi-Fi trade on trendline support and it is also the 38.2% retracement of the 2012 – 2016 rally. JB Hi-Fi should continue to head higher from here, but downside risks remain.

Any potential trade here is not for the faint-hearted. We would look to put a stop near $21. If JBH can turn higher here, then expect resistance to come in near $25.50 and then up at $27.50.


Michael Gable is managing director of Fairmont Equities.

Not yet a subscriber? Join now for FREE! Receive our weekly tips and strategies into your inbox each week.

BONUS: Sign up now to download our 21 page Trading Guide.

Make sure you bookmark our main blog page and come back regularly to check out the other articles and videos. You can also sign up for 8 weeks of our client research for free! Otherwise you can email Michael Gable directly at michael@fairmontequities.com

Disclaimer: The information in this article is general advice only. Read our full disclaimer HERE.