Technicals | Sep 27 2016
By Michael Gable
Last week was a positive one for markets, but we remain cautious and do not expect them to kick on from here. We still expect a revisit of 5200 for the S&P/ASX 200 Index and a potential drop towards 5100. The US markets in our opinion, still look weak. There are some bright spots however and our SAI trade from several weeks ago has received a takeover offer, representing a 40 per cent premium to our entry price, excluding the recent dividend. It is one of those stocks that 90 per cent of people have not heard of, let alone contemplated investing in. This further confirms our opinion that opportunities always exist, you just need to spend the time looking for them.
In today's report we have an updated chart on Vocus Communications ((VOC)) which is one stock that we like but have been keeping an eye on before pulling the trigger.
Our report on VOC three weeks ago was a positive one, but our charting commentary suggested we be patient and wait for cheaper levels. We were eyeing $7 as an entry point but the stock quickly fell through that. Given the severity of the move, we expect that any short-term bounce would be sold into. Resistance is therefore likely to be strong here in the mid $6's. Over time, we expect the shares to drift back down towards $5.50 again. This may take several weeks but buyers should remain patient and wait for those cheaper levels. So our view on VOC is Neutral for the short term in respect of the chart, but we are still positive on the company's future and our charting view would turn positive again down near $5.50.
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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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