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 January 2017. You can access the full version of the article HERE.
BUY RECOMMENDATIONS
Syrah Resources (SYR)
An Australian resources company focusing on its graphite project in Mozambique. The share price has been slashed since its peak in June, but it now looks like recovering about half that loss. Recent price action on the chart has resembled a falling wedge, and SYR recently broke above that. I now expect SYR to rally back towards the base of the wedge. This would give it a target of about $4.50. The shares were trading at $3.44 on January 11.
Senex Energy (SXY)
The first half of 2016 was positive for this oil and gas explorer and producer as it rallied strongly over 30 cents. It then spent the rest of the year drifting sideways. I can now see this price action resembling a symmetrical triangle. About two weeks ago, SXY broke out on strong volume, which was impressive when the rest of the market was trading on lower volumes. We expect the stock to run from here, with an initial target near 40 cents. The stock was trading at 30.7 cents on January 11.
HOLD RECOMMENDATIONS
Orora (ORA)
This packaging company looks undervalued and a stronger US dollar should help earnings. On the chart, ORA made a 3 wave decline from an August peak, with the third wave being 1.6 times the length of the first wave. In Elliott Wave theory, this is significant as it means the pullback has probably finished. It has bounced off support and we expect the stock to rally to prices higher than last year’s peak. The shares were trading at $2.99 on January 11.
NRW Holdings (NWH)
Provides diversified services to the civil, mining and construction industries. After jumping sharply early last year, the stock spent a few months consolidating sideways to digest the rise. It then rallied again during August before tracking sideways once more to consolidate that move. It now looks like NWH is on the move again and we can see potential for it to run towards resistance near 90 cents. Traders should place their stops near 60 cents. It was trading at 72.2 cents on January 11.
SELL RECOMMENDATIONS
Rio Tinto (RIO)
On August 30, when it was trading at $48.52, we suggested to our clients a possible rally to mid $50 levels. It easily exceeded that, climbing above $63 in December. Now, we have noticed a possible reversal with our weekly candlesticks. RIO has formed a dark cloud reversal and we believe it will retreat. We expect support close to $53. The shares were trading at $62.58 on January 11.
Beach Energy (BPT)
On October 17, we suggested a trade to thebull readers, predicting a rise from 75 cents to above 90 cents. This oil and gas company achieved that, but has since fallen to trade at 84.5 cents on January 11. The chart is indicating the stock will fall, so we would take profits in anticipation of cheaper levels in the 70 cents region.
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Disclaimer: The information in this article is general advice only. Read our full disclaimer HERE.