Upside For Incitec?

This story features INCITEC PIVOT LIMITED. For more info SHARE ANALYSIS: IPL

By Michael Gable 

The S&P/ASX 200 Index rose by around 2% last week in the trading days following last Tuesday’s Federal Budget, with the increase driven by stocks linked to consumer confidence, in particular discretionary retail stocks (i.e. JB Hi-Fi, Harvey Norman Holdings) after the Federal Budget contained initiatives around accelerated depreciation for small businesses. (Notably, figures released today from Roy Morgan showed a 3.6% jump in consumer confidence last week following the Federal Budget). This has halted the slide in the Index resulting from weakness in the banks and a plunge in BHP Billiton shares, following the debut of spin-off company South32 (S32).

Another factor likely to help support the Index is that rate hike expectations in the US have shifted dramatically, with the market now pricing in a greater than 50% chance of the first rate hike happening in December versus September.

In this week’s report, we take a detailed look at Incitec Pivot ((IPL)).
 

Our last comment on IPL was on 6 January when we suggested it as a trade. It was trading at $3.26 an we suggested a quick move up towards $3.60. It clearly exceeded that, hitting $4.40. It has now come back towards $3.60 and this area should now act as support for IPL. If it can hold here then it could have a quick bounce up over $4 before using up some more time. Otherwise a failure at this point will have us targeting support near $3.20.

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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