Brambles’ Uptrend Underscored

This story features BRAMBLES LIMITED. For more info SHARE ANALYSIS: BXB

By Michael Gable 

Volatility in equity markets is still at extremely low levels. However, a recent development that suggests that this may change is the movement in bond yields over the last couple of weeks. While most people have been expecting the official RBA cash rate to head higher, bond yields have actually started to move in the opposite direction. This indicates that the bond market is a little uncomfortable with the rate of economic recovery and that rates will stay lower for longer. Some prominent economists have now pushed back their forecasts for interest rate rises, largely due to the federal budget and the short term uncertainty that it is creating.

While fears may be destabilising in the short term, and it pays to be cautious for now, ultimately the lower rates will be a positive for share markets. It will also be interesting to see how the $A holds up here in light of interest rate movements. Clearly, with the trailing off in the mining sector, the $A will be under pressure and charts suggest an AUD/USD exchange rate closer to $0.86 again over the next several weeks. One way to gain exposure to this is through the BetaShares ETF, code USD. The spotlight may also turn again to stocks with US dollar earnings. An example of this is Brambles ((BXB)). Whilst the currency is not the only positive in BXB’s favour, it is still a company worth revisiting, and we have done so here in today’s report.

Brambles

Brambles continues to trend well here, as it has been for the last two years. Short term it looks like it may ease back a little but there is nothing technically that suggests the uptrend is under pressure. It still appears to be a stock where the market is happy to buy the dips.
 

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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

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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