Telstra Setting Up Buying Opportunity

This story features TELSTRA GROUP LIMITED. For more info SHARE ANALYSIS: TLS

Telstra ((TLS)) shares have managed to pique every investor's attention this year, outperforming most other stocks on the ASX as well as every investor's wildest expectations for what was prior a high dividend yielding but perennial disappointing utility-type of stock.

Now that the shares have completed a stellar run since October from $3.90 to $4.39, the TechWizard reports a pullback has become unavoidable. He thinks it will be a healthy exercise as it will set up the shares for yet another stellar run.

The TechWizard is of the view that global equity markets will enjoy a buoyant Christmas rally this year, with share prices in general to rally between now and mid-January. Telstra shares, even though considered a rather safe-haven dividend paying telco, won't be left behind, he predicts.

The most likely scenario, in the Wizard's view, is that Telstra shares will "correct" over a 3-8 day period during which the current overbought conditions will unwind. This will set Telstra shares up for the next move upwards, in his view.

The Wizard reports the buy zone for Telstra shares is between $4.29-$4.18. He notes the MACD indicator is bullish. The Wizard anticipates that, once the current unwinding has run its course, Telstra shares will put in another attempt to better the $4.40 high.
 

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.

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