Opportunity Presenting In Mantra

This story features STRATA INVESTMENT HOLDINGS PLC. For more info SHARE ANALYSIS: MTR

By Michael Gable 

Last weekend, we saw some interesting statistics come out of China, our largest trading partner and second largest economy on the planet. Fixed asset investment grew 10.9% in the first eight months of the year, the slowest since 2000. Because markets are in “negative mode” its another “reason” why China is in trouble. As we have touched on previously, China is moving from an investment-led economy to one of consumption. The other statistic released on the weekend was Chinese retail sales in August. It showed growth of 10.8% which is the fastest pace this year. So while the western media is worried about the Chinese market, the Chinese themselves are confident enough to go out and spend their money at the fastest pace all year.

This means that there are opportunities out there and we just need to switch from “negative mode” back to one of optimism in order to see share prices start to head higher. It will likely take a few more weeks until the market goes back to climbing the wall of worry but with a change of Prime Minister we may see some confidence come back in to the market. We also cannot forget the US Federal Reserve possibly raising rates from nothing to “nothing plus a little bit”. We quietly think that even a rate rise this week can see the market stage a relief rally but we don’t have a crystal ball so we’ll have to wait until the event to see if the market wants to get cheaper or not. All we can do is continue uncovering great opportunities down at these levels. This week it is Mantra Group ((MTR)).
 

MTR has trended higher since listing, with the peak occurring in May this year. Since that peak, the stock has eased back but visually, we can see that this is fairly flat compared to the overall uptrend, which is a positive sign. It has formed a double bottom (indicated by the arrows) which is a bullish sign when you see that within an overall uptrend. Whilst the chart is generally looking bullish in the medium to longer term, in terms of a buying opportunity, it would be safer to wait for it to breach this little downtrend line that was created since the May peak.

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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