Share tips – 17 October 2016

Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.

This post is an extract from the newsletter dated 17 October 2016. You can access the full version of the article HERE.

Buy Recommendations

VOC
We have been positive on VOC for several weeks now but been hesitant to buy while it was falling. Now that the valuation is very attractive and it is hitting our technical targets in the mid $5’s, we are happy to start buying VOC. Despite the short term volatility, we take a medium to longer term view that it will be trading much higher than current levels.

IPH
We’ve been watching IPH for a few months now. We liked the company fundamentals but were looking at some shorter term weakness on the chart before we decided to enter the trade. The last few weeks look bullish and indicate that a possible reversal is now taking place. We are now happy to be buying IPH here. We would look to exit if IPH took out the September low.

Hold Recommendations

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TGR
After being sold off sharply earlier this year, TGR has tried to rally but it is finding a lot of resistance near the 50% retracement mark. This level near $4.30 has seen the buyers step back in and bring it back down towards the uptrend line. The chart is a little neutral at this point in time. Clearing $4.30 would be a positive, but we can see the possibility of a retest of the $3.50 support level. We would therefore wait for one of those scenarios to eventuate first before buying any more.

BPT
BPT has been falling for 6 months now, but closer inspection reveals that this price action is actually a bit bullish. We can now see a clear flag formation on the chart. A break above this flag means that we could now see BPT rally into the $0.90’s.

Sell Recommendations

JBH
JBH is starting to look negative here on the chart. It shot up nicely on the news of the Good Guys acquisition but since then the market has been unsure what to do with it next. We can see on this weekly chart that any move at or above $30 is just met with selling straight away. It may not fall straight away, but we would expect a period of consolidation to now occur. The $22 mark seems to be a good level for JBH so over time we would expect it to head back towards that area instead of heading higher from here.

TLS
For the last two months, we have been viewing TLS’s price action as being a large 5 wave decline, with a target under $5. It has hit our initial target but the potential unwinding of the yield trade has made us reassess our TLS targets and we now see a possibility for it to fall even further towards $4.50.

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