Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.
This post is an extract from the newsletter dated 28 August 2017. You can access the full version of the article HERE.
ORA has been trending higher ever since it first listed in 2013. After peaking a year ago, it then started to trade sideways to consolidate the move. It reported very well a few weeks ago and the stock jumped nearly 10% on the day. It has now broken out of this consolidation which means that it should resume the uptrend and trade to new highs. ORA will also benefit further if the Australian dollar starts to fall again.
After we sold BAP at the end of last year near $6, the share price started to trend lower, falling towards $5 in June. Up until the end of July, the chart was looking fairly weak as it continued to make lower highs. Then at the end of July we saw it break that downtrend on a unexpected announcement. The chart has turned from negative to positive and over the next few months we now expect it to trend higher, eventually heading above the January peak near $6.
SBM had drifted back since the May high but it is now breaking above resistance as the gold price continues to look well supported. A close above $3 would be a bullish sign. If it can do that, then we expect SBM to rally towards resistance near $3.30. If it can’t get going here, then SBM should fall back towards support near $2.60.
JHG had a good run during the first half of this year, initially finding a peak at the beginning of June. It then started to drift back in a flag formation. A couple of weeks ago we saw JHG break above this flag, making a slightly new high before easing back. The breakout was on strong volume, which is a positive sign. All of this means that JHG looks very good technically. It should therefore resume the uptrend. We can see some upside resistance near $50.
After peaking in early May after their results, MQG was heavily sold down. This suggests that the all the upside was factored in and that the stock was too expensive. Since then it has been struggling and we can see some lower highs and lower lows starting to set it. Price action also appears to be on the way towards forming a head and shoulders topping formation. If that does occur, then we could see the stock revisit its pre-Trump election levels in the low $70’s.
A negative candle formed on the weekly candlestick chart a few weeks ago. Unfortunately for IAG, it then spent the last few weeks struggling to overcome the midpoint of that candle. This sort of price rejection is not a good sign. Like SUN before it (which were negative on here at the beginning of July), IAG seems poised for lower levels. We believe that it should eventually find its way down towards support under $6.
Michael Gable is managing director of Fairmont Equities.
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