Technicals | Dec 17 2013
By Michael Gable
The market should rally from here. After rallying from June to October, the market has pulled back 50% of the range. That is indicated by the sold blue line. The 50% retracement is often strong support for the market. We can see from the solid blue arrows that our market has had a few attempts at this level and is poised to rally. This pullback has also resulted in the market becoming very oversold on the RSI (circled).
The pullback in the market started off very correctively at the beginning but then accelerated down last week. We have seen this sort of pattern before and it often leads to the market bouncing back in a V-shaped pattern. This means that there is a good chance the market has found a low and it should rally strongly over the next few weeks. Initial resistance can be found around 5300 but it should then be expected to retest the October high.
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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
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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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