GPT Group On The Up

This story features GPT GROUP. For more info SHARE ANALYSIS: GPT

By Michael Gable 

The S&P/ASX200 Index is trading above 8000, which is something we were anticipating would happen this year.

As we recently noted, the market is now breaking higher; the US dollar is falling back; and commodities are now on the move. Another issue that we touched on recently was the widespread concern that a lack of market breadth in the US was a bad thing.

That is, only a few stocks lifting the index was thought to mean that the rally was on weak foundations and that it was vulnerable to a pullback. Our view was “what if the other stocks started to move higher too?”.

Given what we are seeing in the economy, our view was that it was just a matter of time until funds flowed into the smaller end of the market. This rotation would keep the market moving higher.

Last week has seen some clear evidence of this and other analysts are starting to share our view. That is, the small caps in the US are now being bought up and this is a positive development. We can view this move via the Russell2000 Index, which is an index of small cap US stocks.

Today’s technical view is on GPT Group ((GPT)).

GPT rallied well off the October lows before peaking at the end of December. It then proceeded to ease back to consolidate the move in what looks like a bull flag.

This consolidation is now over, with GPT breaking free this week (circled).

This breakout is a buying opportunity and GPT should now trend higher from here. There will be some light resistance just above $4.70.

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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