Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.
This post is an extract from the newsletter dated 18 September 2017. You can access the full version of the article HERE.
GXY is on the move and a few weeks ago it finally broke the downtrend which had been in place all year. We should now see GXY rally strongly to higher levels. Despite some short term resistance near $2.50, GXY should go on to retest last year’s high near $3.50 as it finally resumes the longer term uptrend.
STO finally broke a downtrend a few weeks ago on high volume. This means that STO should now rally higher. In terms of a target, it is likely to make a move equal in size to the rally from early 2016. That is, we could see it head towards $5.50. Traders should look to exit if the stock moves back under the downtrend line.
AWC spent the last year forming a large ascending triangle but we have now seen a clear break above this pattern. This means that AWC should continue to head higher. There will be some minor resistance near $2.30 but we would be targeting levels over $2.60. If AWC trades under $2 then we would view that as a negative.
It now looks like the stock is reversing a year-long downtrend. We have seen a couple of bullish candles appear on the weekly chart, with volume also now picking up. Our view is that WFD is now likely to trade higher from here. We have an initial target of about $8.75.
We were negative on MQG a few weeks ago and recent price action further confirms our views. It has been breaking down on high volume and despite any short term bounces, we still hold the view that that the MQG is on the way towards the low $70’s.
In April when we looked at DWS, we had the view that it should fall towards $1.35 but they traded higher instead. After doing that, it was quickly belted back down, which now shows that the bears have finally taken control. The stock has gone on to make a head and shoulders formation, which is the sign of a top. This implies that the stock could fall to about $1.10 in the next few months.
Michael Gable is managing director of Fairmont Equities.
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