Fortescue Caught In A Range

This story features FORTESCUE LIMITED. For more info SHARE ANALYSIS: FMG

The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

By Rudi Filapek-Vandyck

The TechWizard has observed shares in Fortescue ((FMG)) have in essence traded inside the $6-$7 range for the past there months. This in itself is not so surprising given the shares rallied from $4 to $7.30 prior to that.

From a technical perspective, reports the Wizard, the shares have met stiff resistance which is limiting further upside. Sooner or later Fortescue will break out of its range, he predicts. But when?

In case of a breakout to the upside (above $7) on a weekly closing basis this should be regarded as a bullish signal, reports the Wizard. The alternative -a bearish scenario- would kick in if the shares close below $6 on a weekly closing basis.

It is the Wizard's view that long term traders can wait for any of these two breaks to occur, while short term traders can play the range in between $6 and $7, until it breaks.

The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au. All views expressed are the TechWizard's, not FNArena's (see our disclaimer).

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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