Technicals | Aug 22 2023
This story features GOODMAN GROUP. For more info SHARE ANALYSIS: GMG
By Michael Gable
US share markets have cooled off by about -5% as anticipated, although the Australian market took more of a hit last week, where we thought it would stabilise closer to 7300.
The S&P/ASX 200 Index is now back near the bottom of the range where it has spent most of the year. That is, apart from a few outliers, the market has generally been stuck in a narrow range between about 7100 and 7400.
If we are looking for stocks to rebound from here, then we can find a few "unloved" stocks and sectors which have, perhaps, been oversold.
Unloved sectors that get oversold tend to offer an opportunity, provided you can get them at the turning point and not buy a heavily down-trending stock just for the sake of being contrarian.
It worked with tech stocks earlier this year, along with retail and energy stocks most recently – which we have also highlighted in this report.
Property has been another unloved sector. Goodman Group ((GMG)), which has been a favourite of ours, has been the strongest performer in that sector, and we have analysis in today's report.
Our most recent comment was on 20 June where we noted "the formation of a "cup and handle". This is a bullish sign and the breakout from the past few days on good volume now implies that GMG will most likely crack the February high and continue on. Current levels are therefore a buying opportunity."
It took an extra few weeks to break above that high, but it has finally done so. Short-term the stock is looking overbought and we should see some form of consolidation here.
Therefore, those looking to purchase should wait for a consolidation. Short-term traders may look to sell here and re-enter on a dip with long-term holders advised to hold here.
A fall back under $21 would be a negative sign. The next major area of resistance from here is up near $24.
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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