No Bounce Expected For QBE

This story features QBE INSURANCE GROUP LIMITED. For more info SHARE ANALYSIS: QBE

By Michael Gable 

Last Friday in the US we saw the November employment numbers come in better than expected. Instead of the market fearing the onset of tapering, it managed to rally nearly 200 points. It was a sign that the market is getting more comfortable with the idea of tapering, or less fearful of a reduction in stimulus. The jury is out on whether it will start later this month or not, but the consensus is still first quarter next year. With our market now near the October lows, the next few days will be crucial in respect to the Santa rally. If we hold here and start to rally higher in the next few days, then there is a good chance that the market pullback is over and we will strive for a new high for the year. In today’s report we offer our take on the QBE shock announcement, as well as identify other trading and investment opportunities as we look forward towards a market at higher levels again.
 

QBE Insurance ((QBE))

 

Before yesterday’s dramatic fall, QBE had been trending up since early October. This is despite the market cooling off in the order of 5 per cent. As a result, we do not think that all the sellers have exited the stock yet. Even though there is good support here at $12, there is a good chance that it will drift southwards towards $11. From there, we believe that $12 will offer strong resistance until a point in time where the market finally regains confidence in the stock. So from a charting perspective, we expect QBE to spend a period of time bouncing along between $11 and $12 without making much headway.
 

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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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