Share tips – 19 November 2018

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

This post is an extract from the newsletter dated 19 November 2018. You can access the full version of the article HERE.

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Buy Recommendations

From the September peak, MQG had pulled back in 5 waves to a low near $110. The strong bounce off that low indicates that there is a good chance that we have seen the low for now. Because the decline occurred in 5 waves, we are unlikely to push through to a new high in the short term and the MQG share price should consolidate here. This means that any dips for now represent a buying opportunity and when this consolidation is over, it will be ready to resume the longer term uptrend.

It appears as though RMD has come back from the recent peak in 5 waves. This means that the recent drop is over for the time being. It has also found support at the old low near $14, bouncing strongly from that level. It now looks like the dip is ready to be bought in RMD. A break above $16 is a signal for traders to perhaps add further to their position.

Hold Recommendations

BXB has rallied strongly since the June low. After pulling back across September – October, the shares started to track sideways, making “higher lows”. It now looks like the shares are close to breaking free of this pattern and continue moving higher. There will be some light resistance near $11, but beyond that we would be targeting a move to just over $12 to fill in a gap created in early 2017.

When the ALU share price jumped on its results in August, it went from about $22 to over $30 in the space of 2 days. Since then the market needed 50 days for the selling to bring it back to $22. Volume was also lower on the way down. This means that there is still some strength in the ALU share price, with support likely to come back in at these levels.

Sell Recommendations

SEK produced a bearish engulfing pattern on the weekly candlestick chart in early September. This is a negative technical signal and the shares have been struggling ever since. Based on recent price action, we believe that SEK shares will drift lower to towards the low $16’s.

Price action continues to remain poor for APT with the stock crucially failing at resistance near $15. There is now a strong chance that we see it break under the $10 level. We place support for it closer to $8


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Michael Gable is managing director of Fairmont Equities.

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