Carsales Could Provide Buying Opportuniy

This story features ANZ GROUP HOLDINGS LIMITED, and other companies. For more info SHARE ANALYSIS: ANZ

By Michael Gable 

Our market appears to be holding up fairly well here so it adds weight to the idea that we should generally grind higher into Christmas and beyond. Despite the decreasing likelihood of a rate cut (the RBA meets today as usual on Melbourne Cup), the market appears to be taking it in its stride. Of course, when it becomes likely that rates will start heading higher, those stocks that have been used as a proxy for bonds will start to come under pressure. Speaking of the banks, holders of ANZ Bank ((ANZ)), National Bank ((NAB)), and Westpac ((WBC)) which have now all reported, can look to write covered calls against their shares before they go ex dividend in order to potentially pick up some additional premium or an “extra dividend”. We have also made some additions to the model portfolio this week as it continues to stretch its legs.

Carsales.com

 

What stands out the most during the recent pullback in Carsales.com ((CRZ)) is the volume. You will notice that the share price started pulling back sharply in October on daily volume that was about 6 times higher than what was seen in the preceding week. In mid October the share price tried to rally on volume which decreased day by day, only for it to come off again very sharply on even greater volume. So the signs are negative for CRZ at the moment. Even last week’s small rally appears to have stopped short at the $10.50 resistance level so once again we should expect to see some downside to CRZ. We anticipate support to hold at $10, otherwise we may see it as low as about $9.60. As long as there is an absence of negative catalysts, we should see strong buying come in at that $9.60 level.
 

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)

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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