Westpac Shares Resume Uptrend

This story features WESTPAC BANKING CORPORATION.
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The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Following a period of sideways price action, Fairmont Equities' Michael Gable believes shares in Westpac look poised for more upside, potentially aiming for $42.

By Michael Gable

There is a bit on in the US over the next week with a Fed interest rate decision on Wednesday night, a number of earnings reports and US mid-terms on 3 November.

Most sectors of the market have fallen back and look a bit oversold, the Russell2000 Index looks like it is ready to bounce, and the S&P500 Index is treading water awaiting the next move.

It also looks like short ETF volume in the US is at a record high.

So, we can’t say that the market is at a euphoric top here.

In a simple sense, it seems like we just want this week’s “stuff” to get out of the way and then it’s back to business as usual.

That is probably why since 1950, on a 6-month and 12-month basis after a mid-term election, the S&P500 Index was up every single time.

Records are meant to be broken, but it’s an incredible stat nonetheless and shows that markets tend to do well when a lot of “uncertainty” is out of the way.

Today, we offer a technical view on Westpac ((WBC))

Westpac has trended lower since its peak in March but it looks to be ready to recover at least part of that decline.

After hitting a low in August, the stock traded sideways for several weeks to form a small base with a line of resistance near $35.

A couple of weeks ago it broke out of that base, came back to retest it, and is now heading higher again.

We expect a recovery from here in the Westpac share price.

Traders may look to buy Westpac here with a tight stop under $35.

There will be an area of resistance around $39-$40, but if it can overcome that then it should head back up towards $42.

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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