Upside For Computershare

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

By Michael Gable 

Another volatile week where markets were pulled back and forth on a “will they or won’t they taper” narrative from various men in the Federal Reserve that most of us haven’t heard of before. Is last week’s big move up to new 5 year highs an exhaustive fear of missing out move that means we will revert to the usual September-October weakness before making any further headway? We think so. HSBC flash PMI yesterday was above expectations so it once again is giving us another box to tick on the list of “reasons to buy when the market pulls back from here”.

One of the sectors that investors look at when interest rates are low is discretionary retail, so we have had another look at that in today’s report. However, back in our election report on 20 August we highlighted Toll Holdings ((TOL)) being a better play and we are proud of the fact that it has rallied very nicely since then, including paying a healthy fully franked dividend in that time. And its only the beginning. We are very much a fan of companies where the stars align fundamentally and technically so we feel that Computersahre ((CPU)) offers investors an opportunity now. We’ve also got our entry zone here on QBE Insurance ((QBE)) so patience does pay off, as well as other small trading opportunities with nice risk/reward ratios.

Computershare

The share price action since May hasn’t looked too good for CPU as the stock became subject to sharp sell-offs and then very lazy rallies where it struggled to make new highs. In the last month however we have seen the share price start to round off above the $9.50 mark which was the last low of the recent uptrend. The rally off that level a few weeks ago indicates that we may be starting to see the end of the recent share price correction. We would ideally like to see it trade above $10.42 which would indicate that the downtrend since May is over. If that were to occur, then CPU could easily rally to a new high where major resistance could be seen at $11.50.
 

Content included in this article is not by association necessarily 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.

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