Goodman Group: Breaking Out

This story features GOODMAN GROUP. For more info SHARE ANALYSIS: GMG

By Michael Gable 

Share markets are continuing to consolidate here while we look forward to the next set of interest rate decisions locally and in the US.

It was interesting to see last week there was an attempted breakdown in the S&P 500 Index, only for it recover just as quickly. Could this be a bear trap?

We need a clear break to the upside to know for sure. Much is being made now of how US markets are being led higher by only a handful of stocks. At last count, the list of things to worry about in 2023 have been:

– Higher interest rates. But now they seem to have peaked;
– Banking crisis. But that didn't evolve into anything sinister;
– A plunge in corporate earnings which would send the market into a tailspin. So far, earnings in the US are beating expectations.

Now we have "market breadth is as bad as the year [insert year here] which was when the marked plunged [enter big number here]%".

Those who are concerned that stocks are still too expensive only need to remove these few big tech names from the index and they will have an index that hasn't moved since the start of the year.

In other words, they have an index that is, dare we say, cheaper. So, the "market breadth is bad" brigade have just countered the argument that stocks are expensive.

What would happen if these down-trodden stocks start to move higher again, finally, and market breadth improves? Anyway, we continue to be open minded that stocks can climb a wall of worry.

Because markets are consolidating here, we don't have too many obvious opportunities for this week. However, we have spotted a buying opportunity in Goodman Group ((GMG)).

We last looked at the GMG chart at the end of November and noted that a low appeared to be in place.  Over time, it has formed higher highs and lows and we are more confident of it heading higher.

In terms of a new buying opportunity, we appear to have one now based on recent price action.

GMG has spent the past few weeks trading in a tight range just under $19.50. Yesterday saw it close just above that level and it appears as though it is moving out of this recent consolidation and is getting back into an uptrend.

Current levels are therefore a buying opportunity.

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
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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