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 4 April 2022. You can access the full version of the article HERE.
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Rising demand for lithium is translating to rising share prices for lithium miners. Pilbara Minerals is one of the country’s largest producers. The downtrend from earlier this year has now been broken and we believe that it is now starting a new uptrend which should see it shortly trade to all time highs.
Technology stocks in general have been sold down heavily in the past 6 months due to an outlook of increasing interest rates. After losing nearly a third of its value in the past 6 months, our charting analysis indicates that the selling has now been overdone and that we have possibly seen a low in the share price. XRO also appears to now be in the early stages of a new uptrend.
MQG’s share price fell back in the first half of this year in response to broader market weakness. However, the underlying business still remains robust and we believe that rising interest rates will actually benefit Macquarie’s earnings. This should lead to the share price regaining its premium rating. The charts also indicate the likelihood of further upside momentum in the share price.
In our prior update at the end of February, we recommended MGX as a buying opportunity. The share price has leapt higher along with strengthening iron ore prices. Despite this, the charting profile indicates a high chance of further share price upside. We anticipate resistance to kick in near 75c.
Coming into their half yearly results in February, the share price of BBN was already in a downtrend. Despite most analysts being very happy with these half yearly results, the share price has continued its downtrend. When any rallies on good news are being sold into by the market, we treat that as a red flag and therefore a sell signal.
Bricks are mortal retail are likely to do it tough as consumer confidence eases back and fears of stagflation affect retail sales. The larges driver of earnings for the next two years should come from asset sales, rather than sales growth, and this should put downwards pressure on a share price which is already in a downtrend.
Michael Gable is managing director of Fairmont Equities.
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