Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.
This post is an extract from the newsletter dated 31 July 2017. You can access the full version of the article HERE.
The chart for BPT is a textbook example of a stock finding a low and preparing to rally. In the last few weeks, BPT has made a higher high and higher low, with recent moves looking particularly bullish. BPT is likely to continue pushing higher here. We have an initial upside target near 70c.
The stock was a market darling a few years but after trading near $1.10 in 2015, it was back under 20c several months later. It now looks as though CAJ has completed its base-building, with the stock rounding out a low near 10c. It has recently jumped out that base and it should keep rallying higher here. We have an initial target of about 32c for the stock.
We turned positive on JBH in June and the share price continues to deliver. Price action still looks very positive and we can see further upside in the share price towards $27. Once it gets to that level, we will need to reassess whether it is time to take profits.
BHP has started to show signs of wanting to trade higher and is therefore a hold for now. Since peaking in January, it has been trending lower, making a series of lower highs and lower lows. A few weeks ago we saw BHP trade above the May high, making its first “higher high”. It is now easing back and we would expect it to now make a “higher low”. This could occur somewhere near $23 as it retests the downtrend line.
We have seen the warning signs on the QAN chart. There was a lot of price rejection around $5.80, and it has struggled ever since. We have likely seen a top for now and could be a shorting opportunity for traders. The most obvious support level will be back in the $4 – $4.50 range.
Suncorp has tried to go to a new high in the last few weeks but it has failed and instead seen some heavy selling, confirming our previous sell recommendation. The volume is also starting to pick up on the way down, which is also a negative sign. In our opinion, any dead cat bounce towards the mid $14’s is another selling opportunity.
Michael Gable is managing director of Fairmont Equities.
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