Share tips and stock recommendations for the Australian (ASX) share market – buy, hold, and sell. Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.
This post is an extract from the newsletter dated 16 August 2021. You can access the full version of the article HERE.
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BSL provided strong earnings guidance at the end of July due to high demand for their steel, and this caused a spike in the share price. We can see on the chart that this has provided us with a textbook case of an upside break from an ascending triangle. This means that BSL should start a new rally from here.
At a recent quarterly update, MQG indicated a lower dividend pay-out ratio, but the market appears to have taken this in their stride. The prospects of the business investing more in growth opportunities has seen the share price start to edge higher, and it looks like it is set to trend higher again after few months of trading sideways.
LYC is the largest rare earths produce outside of China, and this is a sector that is seeing a lot buyer demand. The shares in LYC trended well in the first half of this year, before taking a breather across March – June. Then at the end of June they started to rally and LYC is now back into a strong uptrend.
GXY shares rallied at the start of the year, and then peaked in May. They then consolidated that move by trading sideways in a clear range. On 22 July, it broke higher again on strong volume as buying has increased in lithium stocks in general. The shares of GXY are now back into a strong looking uptrend.
ELO shares have been in a downtrend for the last year and have failed to show any meaningful buyer support. Their recent full year results have failed to inspire the market and the share price continues to be sold down. We are likely to see the shares fall back towards levels near $4.
MSB have spent over 10 years raising money from the market and they still do not have anything to show for it. There have recently been questions over whether the business can remain solvent, and this is not the type of business that investors, or even punters, need to be involved in. The share price also continues to trend lower.
Michael Gable is managing director of Fairmont Equities.
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