Technicals | Aug 05 2014
By Michael Gable
It has been a wild ride the last few days for the Australian market, caused by a sell-off overseas. To paraphrase an article that we read last week (the author’s name escapes me), we could only find excuses not reasons. With money printing still in the background and low interest rates remaining, dips in the market will be bought. We have a look at the chart of the S&P ASX 200 Index in today’s report. If we are wrong and support levels break, then within a week or two you will need to consider buying the dip instead of selling in a mass panic. Although the market is not cheap anymore, it also isn’t expensive yet.
We have taken a closer look today at Atlas iron ((AGO)).
Since the lows in mid June, some iron ore stocks have done better than others. Fortescue Metals has done well, Arrium has done nothing, while until two weeks ago, Atlas Iron was also struggling. However, two weeks ago it started to show some support and formed a “higher low”. Having rallied strongly in the last few days, it has now formed a “higher high”. While more conservative investors would like to see a couple more higher highs and higher lows, those with a bit more risk appetite might view this here as a trading opportunity and could expect to see it meander back up to levels around $0.90 – $1.
[Note: Atlas iron is the third most shorted stock on the ASX at 14.4% – Ed]
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
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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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