QBE Oversold?

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

By Michael Gable 

The big news in the last week has been the historic steps by the ECB to cut interest rates to below zero. So, banks in effect will pay the ECB for holding their money. The obvious aim of this is to get money back into the system and stimulate the economy. You would then expect the euro to go down as the currency sought better rates elsewhere. In fact, the opposite occurred. The euro went up as rates are not likely to be cut further by the ECB. The question now is whether it is enough. Some analysts expressed disappointment that the ECB did not implement its own QE program. So, it remains to be seen what flow on effects it may have for the Australian equity and currency markets. Could we see renewed interest in Australian banks and currency? Or, as indicated by the contrarian move in the euro, have the ECB actions already been priced in and the opposite will occur?

This week, we take a look at QBE Insurance Group ((QBE)).
 

 

QBE on a daily chart looks oversold and could potentially bounce here in the short term up towards $12 where it will encounter some strong resistance. There is a still a risk however that QBE, on the back of a negative catalyst, takes a hit back down towards $10 again. If that were to happen, there should be sufficient bargain hunters to ensure that it remains strong support.

Content included in this article is not by association 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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