Lynas Poised To Revisit Recent High

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This story features LYNAS RARE EARTHS LIMITED.
For more info SHARE ANALYSIS: LYC
The company is included in ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

After almost retracing its year-to-date rally, Fairmont Equities' Michael Gable notes Lynas shares have bounced strongly from below $14 on high volume.

By Michael Gable

The big news of the past week was the interest rate rise in the US.

As we noted in our last report, it was pretty much priced in and getting that out of the way should lead to a recovery later in the week.

We have since seen a bounce in precious and base metals, and US indices are starting another rally, which confirms our recent bullish comments on the US market.

The Australian share market is a bit slow to the party as usual, but we should start to see a recovery from here, once again led by the big miners.

Today, we offer a technical view on Lynas Rare Earths ((LYC)).

After peaking in April, Lynas shares then started to decline again, almost retracing the entire rally from the start of the year.

At the end of July it dipped under $14 before bouncing again.

However, the past few weeks has seen it retest that July low, undercutting slightly a few days ago before bouncing strongly again last Friday on large volume.

We now have some bullish divergence which is where Lynas made a new low last week but the RSI didn’t.

That is, the RSI bottomed in July even though the share price made a new low.

This divergence between price and the RSI can often be a sign that the stock has bottomed and we should expect at least a short-term rally from here.

Lynas is a buy here and we expect a rebound to at least the high $16’s before we can reassess.

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services. 

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
 

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