Technicals | Feb 09 2016
By Michael Gable
This week is a busy one with companies reporting. The earnings backdrop is weak and down here a lot of negativity is priced in. We do see the other side of the coin though. We realise that there are also positives such as strong employment, a weak dollar, low oil and interest rates etc. This means that as long as companies on average do not further disappoint an already fearful market, then we can see some stronger support come in at these levels.
We recognise that the Australian market is not hugely cheap, but seasoned investors know that its only a matter of time until the coin flips over from fearful to greedy. And sounding like a well-worn record again, it is the stocks that display a quality result and come in-line or above expectations that will do well. In today's report we look at the chart for Capilano Honey ((CZZ)).
The last six months has seen CZZ consolidate the great run that it had in the prior two years. There seems to be plenty of support under $18 and price action is forming an ascending triangle. With a market beating report yesterday, we expect CZZ to bounce off support here and head back up towards resistance near $23. Only on a break of that resistance level would we expect CZZ to continue upwards and resume the uptrend.
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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
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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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