Trading Opportunity In Myer?

This story features MYER HOLDINGS LIMITED. For more info SHARE ANALYSIS: MYR

By Michael Gable 

A push through 5700 for the ASX200 last Tuesday preceded a sharp sell-off in the market, bringing our index back to long-term support. This level was last seen in mid July. In an environment where we need to buy the dips, it merely opens up more opportunities again. This is especially so when you realise that the pullback was a temporary sell-off in bank shares in order to fund the ANZ raising. Reporting season is in full swing and is once again throwing hand grenades with stocks such as Orica (profit warning) and Ansell losing about 20% on poor reports. This week will see big names such as CBA, CSL, and Telstra report their results. Eyes are on CBA in terms of a potential raising and CSL with the share price poking around the $100 level.

Today we look at a trading opportunity in Myer ((MYR)).

 

The stock is in a downtrend but for those with a bit of risk appetite, there are signs that it could be trying to find a low. We have noticed the stock hitting these lower levels this year in the form of a “3 thrust low” which is a sign of a bottom, but not only that, the price action appears to be tightening up in the shape of a falling wedge. It looks as though MYR is breaking from this now. If that is the case, then we should expect a move up towards the top of the wedge, which is near $1.90.

Editor's Note: According to ASIC data, Myer is the most shorted stock on the ASX (~20%), suggesting short-covering rally potential. Four of seven covering FNArena brokers rate the stock a Sell.
 

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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