Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.
This post is an extract from the newsletter dated 8 May 2017. You can access the full version of the article HERE.
WEB has been trending strongly for two years now, except for a big sell-off in November last year. After that price drop, the share price rallied back up again but has been drifting a little lower since February. This congestion under the 2016 is actually a positive sign as it readies itself to break to new highs. A solid move through $11.60 could see WEB push through the prior high. Otherwise a clear move under $11 would be a negative.
BTT has convincingly broken out of triangular continuation pattern. We would look for weakness towards $11 – $11.50 for an entry point but momentum is strong in the stock and it should continue to push through to new highs over the next few months.
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We last looked at CCP earlier in the year and it seemed neutral at the time. Price action during February and March has seen it retest support and now it seems to have broken the mild downtrend that started last year. It is now up against strong resistance in the mid $18’s again. If it breaks higher then it should be followed. Otherwise weakness back to the mid $17’s can now be bought with some more confidence in light of its recent strong move off support near $16.
Since the peak in October 2015, SDA started to trend lower but this merely looks like a large flag formation. Earlier this year saw SDA break above the flag, retest it, and now it is heading higher again on good volume. The charts now suggest that SDA can continue trending higher to at least retest the 2015 high.
The shares are now close to being fully valued again and the stock has moved up vertically in the last several days as the “fear of missing out” trade now taking place. We would now expect a retracement back to under $4
Since taking a tumble in February, the shares have continued to show signs of weakness on the chart. Any rallies are short lived and the sell-off’s are still very impulsive and on high volume. We are targeting a move back under $1 at which point we can reassess.
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