More Upside For Atlas

This story features QBE INSURANCE GROUP LIMITED. For more info SHARE ANALYSIS: QBE

By Michael Gable 

In recent weeks there has been a lot of focus on the agriculture sector as multiple bidders vie for control of Warrnambool Cheese & Butter ((WCB)). Even before Warrnambool hit the headlines, there has been a growing awareness that Australia can benefit from an increasing demand for food from Asia. So in this week’s report, we have a look at some of the listed stocks in this space and try to get a feel for which ones are likely to do very well, to the point where some may become takeover targets themselves.
In our “Charting” section today, we have looked at a couple of stocks that we already hold in the model portfolio. QBE Insurance ((QBE)) and Atlas iron ((AGO)) have both seen significant breakouts recently which suggests that traders can look to get involved now and take advantage of some new found momentum.
 

Atlas Iron

Iron ore stocks have done very well in the last few months, but AGO has arguable underperformed as it briefly fell out favour with the market. However, it now appears to be playing catch up and appears to offer better returns in the mid cap space. Last week saw AGO break through key resistance at $1.10 on very good volume. In fact, volume has been very impressive for the last few weeks as the share price has climbed higher. As long as the share price remains above $1.10 (which is now support), we expect it to rally up towards $1.50. Before then, it can find minor resistance at $1.20 and $1.27. So traders are able to run a tight stop at current levels and have the potential for a healthy risk/reward of 5c for a 35c gain.
 

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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