Buying Opportunity In Telstra

This story features TELSTRA GROUP LIMITED. For more info SHARE ANALYSIS: TLS

By Michael Gable 

Markets overnight have bounced back on news of China cutting the Reserve Requirement Ratio by 1 per cent, the largest cut since the GFC. They have nearly clawed back the losses from Friday night which were arguably blamed on the Chinese freeing up more shares that could be shorted. Greece also played its part again, as the IMF indicated that finance negotiations are likely to drag out longer than expected. This week, we have RBA governor Glenn Stevens giving a speech in New York, along with the release of minutes from RBA’s April meeting and consumer confidence data. In today’s report, we spot a positive opportunity in Telstra ((TLS)).
 

Telstra was trading in a well defined channel before breaking out of that at the end of last year and heading to new levels. What we have noticed now is that TLS is pulling back in five waves. The 5th wave is almost complete and that would bring TLS right back to the top end of its previous range. It is likely to hold there in the absence of any bad news and continued interest in its yield which has now gone up to 5.2% due to the recent share price weakness. We would expect to see TLS come back to about $6.00 – $6.10 at which point that would be the next buying opportunity.

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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