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 29 June 2020. You can access the full version of the article HERE.
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There appears to be a rotation back into health care stocks, and ResMed is a beneficiary of that. They are a producer of medical devices including respiratory masks. Not only has the share price held up well in the last few months, but it is on the move again. Momentum has now come back into the stock and we expect it to continue trending higher from here.
CSL is benefiting from a rotation of funds back into healthcare stocks. There has been very strong support for the share price near $280 and price action in the last two weeks is indicating to us that it is ready to move higher again. Even if the broader market decides to weaken off, we expect the CSL share price to hold up well here.
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QAN shares continue to trade well as the market factors in an economy which is opening up quicker than what was being priced in back in March. QAN is effectively a monopoly now, and has government support, which means that any downside from here is fairly limited.
The share price of SYD was oversold in March on the assumption that flights would not resume for a very long time. As the economy in Australia reopens, flights will slowly increase. Even if flight numbers are at vastly subdued levels by the end of the year, SYD still looks cheap here and still offers good upside from a longer term perspective.
This provider of wealth management software is facing increased competition and falling funds under management. The chart of PPS also looks negative as the share price has started to fall under some major support levels. Volume has also picked up on the downside, which is not a good sign.
This gold producer recently downgraded their guidance and there has been a lack of buying pressure despite the rise in gold prices. Gold stocks are also not immune to market weakness which means that EVN is unlikely to provide a hedge to share portfolios. At this moment in time, there are better gold stocks out there to invest in.
Michael Gable is managing director of Fairmont Equities.
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