G8 Losing Momentum

This story features G8 EDUCATION LIMITED. For more info SHARE ANALYSIS: GEM

By Michael Gable 

After taking a breather last week, the market is starting to look bullish again as we head into the domestic reporting season. Earnings results from some US companies have helped the Dow Jones touch record highs again and our market wants to move away from its recent underperformance. With Goldman Sachs now tipping a rate cut here in Australia, and the big miners looking to beat guidance, the tone has started to turn a bit more positive again. The “correction that we have to have” appears to still be a few months away, perhaps after companies report and we enter that dangerous period around September/October when our market tends to show signs of weakness. This week we have an in-depth look at market darling G8 Education ((GEM)).
 

Since falling to its low point in May, GEM has struggled to head higher. We would have preferred to see a more comprehensive move higher but at this point the rally is starting to look very corrective. This leads us to believe that the share price might be vulnerable to another move down. We would be looking for levels down towards $3.80. However, there is some very strong support at $3.40 so if the share price falls and it cannot hold $3.80, then investors should wait for those lower levels.
 

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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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