Lining Up The Domino’s

This story features DOMINO'S PIZZA ENTERPRISES LIMITED. For more info SHARE ANALYSIS: DMP

By Michael Gable 

This market rally that we predicted has materialised in a sensational way. If we are honest with ourselves, we didn’t expect it to push past the 2 January high so quickly. Even though the Dow Jones was oversold 2 weeks ago, our market wasn’t. When we predicted the V-shaped rally in mid December, our market was much more oversold at that point compared to where it was 2 weeks ago. The scaremongering bears from two weeks ago are clearly licking their wounds for now. Emerging markets are yesterday’s news – for now. As a result of the overperformance of our market during the last two weeks, we would expect some lacklustre trading sessions in the back half of this week. This is despite many companies reporting very good earnings. That inevitable cooling off would provide good buying opportunities. As usual, the key to a good trade is finding a company that reports well but had been sold off before hand. Last week’s performance of Carsales.com was a classic example. But beware the expensive company that disappoints.
 

Domino's Pizza ((DMP))

 

Domino's has been trending well for the last couple of years, seeing the share price triple during that time. Last week’s gap up on decent volume could be a final exhaustive move, where the last of the buyers all rush in at the top of the trend. If that is the case, then we should see a sudden drop off over coming days on decent volume. If we don’t see that happening, then we can safely assume that DMP will continue to trend higher. However, it is fairly overbought here so if we are looking for an entry point, we would wait for a pullback to about $16.50.
 

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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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