Upside Potential For Downer

This story features DOWNER EDI LIMITED. For more info SHARE ANALYSIS: DOW

By Michael Gable 

The Dow Jones last week broke to the upside of an ascending triangle but within a couple of days it was sold back down. This means that it was a false break and lower levels are likely for the Dow. Our market has also broken down from a rising wedge so unless it can quickly rally higher in the next few days, then we should see lower levels also over the next few weeks. The next level of support is around 5300.

In today’s report we identify an investment opportunity in Downer EDI ((DOW)).
 

 

The chart for DOW is looking positive here. We can see a very obvious break out a couple of weeks ago from an ascending triangle when it pushed through the $5.20 region and had a quick run up towards $5.60. The stock is now coming back and what we need to see is DOW stay on top of that breakout zone. If it dips under then it could be in trouble. If it could hold, then investors who missed the breakout will have a second chance to enter. If we project upwards and assume a move in equal length to the base of the triangle, then we are looking at levels at least as high as $6.00.
 

Content included in this article is not by association 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.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Click to view our Glossary of Financial Terms