Macquarie Group Upside

This story features NEWCREST MINING LIMITED, and other companies. For more info SHARE ANALYSIS: NCM

By Michael Gable 

There’s a lot of chatter at the moment over the election result and what it means for the market. We already covered off on that idea in our report on 20 August so we will now move on to other ideas. With the potential for action in Syria, we are seeing gyrations in the price of oil and gold. While energy stocks still generally look good from a medium-longer term perspective, the gold trade is just a short term one in our view. We looked at Newcrest Mining ((NCM)) two weeks ago and that is once again shaping up as a good short term trade, but our advice to investors is to not ride it for too long. More trade data out of China has once again provided a short term lift for resources in general and some are saying that Japan winning the Olympics will provide a boost for resources companies. But you would think that someone had to win the Olympic bid and start building stadiums anyway, so we fail to see how that can be a factor in a resources rally.

In today’s report we have looked at a couple of stocks which are classified as “high beta” and which should do very well if the market continues to push higher over the course of the year. In Macquarie Group ((MQG)) and Leighton Holdings ((LEI)), we have two stocks which investors should seriously consider adding to their portfolios if they are looking to start rotating out of overpriced stocks and into those which can outperform the market.

Macquarie Group

We looked at MQG in our “Charting” section a couple of weeks ago. We looked at the very exciting price action continuing to develop on MQG which suggests that we are close to seeing significant upside. For the last few months, and especially in the last several weeks, we can see the share price of MQG start to converge to a point around $44. This symmetrical triangle is like a compressed spring and once it breaks out, we can get a very impulsive move. Since MQG has been trending up, the likely breakout will be to the upside. The last couple of days have seen MQG knocking on the door of a breakout to the upside. If that were to occur, we could expect to see MQG rally up towards the mid $50s.
 

Content included in this article is not by association necessarily the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

After leaving Macquarie Bank's Securities Group in 2008 after many years of service, Michael has gained a highly regarded reputation in the financial services industry. As a Private Client Adviser with Novus Capital, Michael has become a popular live commentator and analyst for Sky News Business Channel’s “Your Money, Your Call” program. He is also the author of the weekly stock market report “The Dynamic Investor”.

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management.

Michael 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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