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 January 2023. You can access the full version of the article HERE.
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Ansell has provided a buy signal on the chart. There was some major resistance near $28 which it managed to break above several weeks ago. After consolidating that move, it is now pushing beyond the next line of resistance, which is another positive move. The stock is in a strong uptrend now with no signs of weakness.
We are bullish on commodities and in particular, gold, for 2023. EVN is one of the largest gold miners on the ASX. The share price has been trending very strongly over the past 3 months and we do not see any signs yet that this trend will end. Any short-term weakness is a buying opportunity.
Copper is another commodity that we are bullish on for 2023. With OZL under takeover offer from BHP, that leaves SFR as the largest pure play copper stock on the ASX. We have seen significant trading volumes underway in SFR during the past few months and it has now established a new uptrend.
This coking coal explorer has just recently loaded its first train and is on track to make its first export shipment. The share price has been trending higher since November and good trading volumes are now coming back into the stock. This is a good indication that the share price will try to get back near its 2022 high of 43.5c.
Sales and profits for this online retailer are heading lower, with gross profits declining in the year ending 30 September 2022 by 40.4%. As a result, the share price remains in a long-term downtrend. Sales have the potential to cool off even further in 2023 as interest rate rises start to bite, and margins may be difficult to maintain if KGN continues the need to clear excess inventory.
Falling paper costs after two years of increases is a positive for ORA. However, ORA is unable to increase margins on the back of this. The share price still trades on an elevated P/E compared to its earnings growth, and the share price chart remains in a downtrend. This indicates further downside pressure on the share price.
Michael Gable is managing director of Fairmont Equities.
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