Can CBA Bounce From Here?

This story features COMMONWEALTH BANK OF AUSTRALIA. For more info SHARE ANALYSIS: CBA

By Michael Gable 

We highlighted a few weeks ago how weakness in the banks will lead to weakness in the market and we are now seeing losses this month of about 15% for ANZ, NAB, and WBC. Commonwealth Bank ((CBA)), which is in today's report, is down about 9% so far. 

Everyone hates the banks now, so if you expect them to keep falling then you are right in assuming that they are likely to bounce here – for the short term at least.
 

The fall in CBA has been fairly shallow compared to the other banks (owing to the fact that it hasn't paid a dividend this month). However, that is not to say that we can't see more downside. CBA looks as though it will fall in 5 waves from the peak a month ago. Having broken down from wave 4 yesterday, it is getting close to support here in the mid $78's. It if bounces here and meets a lot of selling pressure near $80, then it has a chance of falling further towards support near $76.50.
 

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Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services. 

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

Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). 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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