The Long And Short View Of REA

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

By Michael Gable 

Several weeks ago, we spoke of opportunities opening up in the market with it having fallen to attractive levels. We saw our shares in Veda Group (VED) receive a takeover offer, our holding in M2 Group (MTU) receive a merger proposal, and now our tip in iProperty Group (IPP) from a few weeks back is subject to a nice offer from REA Group ((REA)). Speaking of REA, it has done very well in the last few months while the market was falling, returning over 14% in that time excluding dividends. I think you have to be a bit active in this market, so we've been happy to take another profit there and move on. We have an updated chart in today's report.
 

The longer-term trend for REA is still looking bullish, but it is now hitting some strong resistance and there is a good probability that it will pull back here, despite yesterday's bid for IPP. We can see that REA has moved to the top of the range, as predicted a number of months back. If the stock breaks here it could make a quick move into the low $50's. However, if we count the moves made within this flag formation, then we are likely to see one more dip down about half way to the mid $40's. Traders can consider taking some easy profits here and buy back in on that dip, or wait for the eventual break to the upside.

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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