Upside For MYOB

This story features PREMIER INVESTMENTS LIMITED. For more info SHARE ANALYSIS: PMV

By Michael Gable 

As the market continues to make its way higher towards our 5350 target, we have decided to sell something else into that strength. As we showed last week, Premier Investments ((PMV)) was breaking out and looking very bullish and their half year results on Friday saw the stock put on another dollar in the last two days. Given the overbought nature and the stretched valuation, we have decided to sell our PMV shares for a 19.7 per cent return in the last 5 months. This once again demonstrates our advice that a medium-term horizon will yield better results in this type of market.

Last week was notable for the confirmation that the US Fed will not raise rates according to the time frame set out last year. By not raising rates each quarter, despite a strong job market, they have softened the $US and, in our opinion, increased inflation expectations and that leads to the attractiveness of gold. We highlighted a few weeks ago that gold has broken its downtrend and was starting to look positive. Last week's events will add another reason to believe that the price of gold could head higher from here. Because of the softening $US, the strength of the $A is going to (for the time being) be higher than previously expected so if you are not looking at a gold company to invest into, the way to play this strength in gold is to purchase a currency hedged ETF such as that by Betashares (ASX code: QAU).

In today's report we take a look at  MYOB Group ((MYO)), which looks interesting here.

MYO has had a great run since mid Feb. It is now knocking on the door of some resistance here, but we have noticed that price action so far this year has formed an inverse head and shoulders. This means that if we get above this resistance line and extrapolate a target, we could see MYO head back towards the $3.70 level.
 

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)

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.

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

Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). 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.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Click to view our Glossary of Financial Terms