Technicals | Dec 06 2022
This story features FORTESCUE LIMITED. For more info SHARE ANALYSIS: FMG
By Michael Gable
In the past week we have seen lower than expected CPI numbers in Australia, and we have had confirmation from the US Federal Reserve that they are looking to slow down the rate of interest rate rises. Combined with China relaxing their COVID policies, it is not surprising to see markets do well. A little bit of selling overnight near the 200-day moving average for the S&P 500 Index was to be expected, but the environment for trading is much better now than it was a few months ago. We are not out of the tunnel yet, but the light at the end of it is getting clearer.
Our call to be focusing on resource stocks is pleasingly working out well. In today's research we have charts on Fortescue Metals Group ((FMG)).
We last looked at the FMG chart on 8 November when it was trading at $16.64. We commented that it had formed "an island reversal (circled). This is a bullish sign and is reminiscent of the lows in March. We expect a sharp recovery here in FMG and this is therefore a buying opportunity." A few days later, FMG broke above the downtrend line and then spent the next couple of weeks consolidating the move on lower volumes. Higher volumes are now coming back into the stock and it is getting a move on here. Any weakness back towards $20 would be a buying opportunity. A drop back under $19 would be a negative. If FMG does continue upwards from here, it is likely to consolidate for a short period of time between $22 and $23, with a break above $23 being the next buy signal.
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
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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