ASX 200 Volatile, Computershare Overbought

This story features COMPUTERSHARE LIMITED, and other companies. For more info SHARE ANALYSIS: CPU

By Michael Gable 

Chinese data continue to keep the market on edge here ahead of today’s RBA meeting. Yesterday’s sell-off as usual was overdone but we will most likely endure more volatility over coming weeks. The best way to manage this volatility as usual is to look at individual trading opportunities. Computershare ((CPU)) appears to be a short here while Santos ((STO)) and Orica ((ORI)) offer potential long positions from very attractive levels.

Last week I wrote that “the most likely price action now in the market will result in a few weeks of volatile movements with a 200-300 point range.” And that is exactly what we are seeing here. It is too early to call any clear direction yet, and as always its best to concentrate on individual stock movements other than the overall market.

Computershare

Computershare is one of those companies that I like with US dollar earnings, but there is something wrong with the way it is trading here which suggests that we don’t need to be rushing into it just yet. In comparison, stocks like Brambles ((BXB)) and Aristocrat Leisure ((ALL)) have made some strong moves up, and then the pullbacks have been very shallow and corrective. CPU is doing the opposite at the moment. The pullback from the May high to the June low was very sudden. Since then, the rally in the stock has been very slow and on low volume. Once it reached about half of the range of the May-June decline, it struggled to go higher and has since been sold off sharply again. So I would now expect the share price to suffer another drop equal to the May-June decline. That takes us just under $9.40 which happens to be the April low. All else being equal, that should be a buying opportunity.
 

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Visit Michael Gable's website at  www.michaelgable.com.au/.

After leaving Macquarie Bank's Securities Group in 2008 after many years of service, Michael has gained a highly regarded reputation in the financial services industry. As a Private Client Adviser with Novus Capital, Michael has become a popular live commentator and analyst for Sky News Business Channel’s “Your Money, Your Call” program. He is also the author of the weekly stock market report “The Dynamic Investor”.

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management.

Michael 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 (Rep. No. 376892) of Novus Capital Limited AFSL 238168 ACN 006 711 995. Michael Gable and Novus Capital Limited, their associates and respective Directors and staff each declare that they, from time to time, may hold interests in securities and/or earn brokerage, fees, interest, or other benefits from products and services mentioned in this website. This website may contain unsolicited general information, without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particular investor. Before making any decision about the information provided, you must consider the appropriateness of the information in this website or the Product Disclosure Statement (PDS) or Financial Services Guide (FSG), having regard to your objectives, financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you, particularly if based on past performance. Michael Gable and Novus Capital Limited believes that any information or advice (including any securities recommendation) contained in this website is accurate when issued but does not warrant its accuracy or reliability. Michael Gable and Novus Capital Limited are not obliged to update you if the information or its advice changes. Michael Gable and Novus Capital Limited and each of their respective officers, agents and employees exclude to the full extent permitted by law, all liability of any kind, in negligence, contract, under fiduciary duties or otherwise, for any loss or damage, whether direct, indirect, consequential or otherwise, whether foreseeable or not, to the extent arising from or in connection with this website.

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