Technicals | Mar 07 2023
This story features SOUTH32 LIMITED. For more info SHARE ANALYSIS: S32
By Michael Gable
Markets bounced at the end of last week and for the first time since January, we may be set for a positive week on the Australian market.
Much of that, of course, depends on the commentary by the RBA today because last month's talk of multiple rate rises took traders by surprise. It does seem as though the overwhelming consensus is now for many rises and an inevitable recession.
This means that we have to be open to the consensus getting it wrong. We may know more in the next few days whether markets have become too negative on the outlook.
Despite a soft day yesterday for resource stocks, they still appear to be the sector with the best opportunities. The chart this week is on South32 ((S32)).
The price action for S32 is looking very bullish on a weekly chart.
We last looked at the chart in early November and noted that it should break higher and get moving again. After that, it formed a very clear line of resistance near $4.35 (horizontal blue line). It broke higher again in early January before coming back to retest that blue line.
Last week we saw S32 test that old resistance line (now support), and rally strongly to form a bullish engulfing pattern on the weekly chart (circled).
This price action, as the name suggests, is very bullish. There is a high chance that S32 continues to trend higher from here.
We may see a few days of sideways movement as it tests the January high. A break above the January high would present the next buying opportunity and that means we would then be targeting the 2022 highs for the next line of resistance.
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.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On
For more info SHARE ANALYSIS: S32 - SOUTH32 LIMITED