TechWizard Identifies Stocks Poised For Weakness

This story features PALADIN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: PDN

By Rudi Filapek-Vandyck

While overall confidence seems to be building that equities are preparing for a break-out to the upside, which would be a nice change given the dreadful side-ways correction since late April, the TechWizard reports he has identified several stocks that look poised to head lower (not higher) in the short to medium term.

His observation falls in line with observations elsewhere that recent gains in the US seemed more supported by short covering than from renewed buying by investors on the sidelines.

Stocks identified by the TechWizard include Paladin Energy ((PDN)), Newcrest ((NCM)), Origin Energy ((ORG)) and Santos ((STO)).

Concerning Paladin, the TechWizard observes the shares have pulled back to the 20 moving average (M/A) and the MACD indicator is bearish. A close below the 20M/A will simply attract more selling, he predicts.

Newcrest shares have managed to climb back above the 20M/A, reports the Wizard, but the MACD indicator remains bearish. Last time this happened, in May, the shares fell back below the 20M/A and this brought out the sellers, driving the share price to a new low, he points out.

For Origin Energy, the technical picture looks similar as for Newcrest. The Wizard predicts we might see a short-squeeze rally, but then lower prices should be expected.

The technical outlook, and his view, for Santos is similar as for Newcrest and Origin.

The TechWizard has notified us he at present does not own any shares in any of the companies involved.

The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au. All views expressed are the TechWizard's, not FNArena's (see our disclaimer).

Technical limitations

If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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