Opportunity In Treasury Wine

This story features TREASURY WINE ESTATES LIMITED. For more info SHARE ANALYSIS: TWE

By Michael Gable 

The US Federal Reserve not raising rates has had the opposite effect to what the pundits were predicting. We were hoping for a raise in rates and expected that to send the market higher, not lower as everyone else was predicting. By not raising, the market has only become more nervous with the continued uncertainty. It will move beyond it of course but for the short term at least we will continue to be directionless and any short term trading will be very tough.

A couple of weeks ago we mentioned how the lower Australian dollar will be one of the catalysts for our market to eventually trend higher again. This is because overseas money can now buy a market that has not only fallen 1000 points, but is even cheaper again because of the currency translation. We are starting to see evidence of this with a bid last Friday for Veda Group (VED) which is one of our holdings. The bidder, Equifax, is based in the UK and we expect to see more interest in Australian companies that have been sold down aided by the weaker Australian dollar.

Today we look at Treasury Wine Estates ((TWE)).
 

TWE has been nicely trending higher since the lows in early 2014. When it got near the 2013 high about a month ago, the shares were sold down for a few days. However, instead of the stock undergoing a further sell-off, it has managed to edge higher again. So, the 2013 high is unlikely to be a major problem for TWE. It just needs to use up some more time under that level and if can hold around here, then we could see it break to the upside, at which point traders may wish to follow it.

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.

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