Is The Long Wait For CSL About To End?

This story features CSL LIMITED. For more info SHARE ANALYSIS: CSL

The Chartist reports, absent a much deeper share price fall, it looks like CSL shares might be ready to leave the past four-year trend pause in the past

29/5:
Daily Trend: Neutral
Weekly Trend: Neutral
Monthly Trend: Up
Support levels: $228.65
Resistance levels: $306.42 / $320.42 / $342.75 (all-time highs)

Calendar Events:
Report Date: August 2024     Ex-Div Date: T.B.A

TECHNICAL DISCUSSION

Reasons to be bullish long-term (downside risk short-term):
→ Approval of the new pipeline drug garadacimab could add US$700m to the top line over a decade.
→ The company is optimistic about Seqirus capturing market share from GSK.
→ The Behring operations should be the main driver of group earnings.
→ Data for March shows plasma volumes for the industry continued to grow.
→ Long-drawn-out triangle continues to evolve.

CSL ((CSL)) is divided into three main business units: CSL Behring, CSL Seqirus and CSL Vifor. Behring, acquired in 2004, manufactures and distributes blood plasma products. Seqirus was formed by a rebranding of BioCSL and the acquired Novartis flu business (bought in 2015) makes flu-related products and performs pandemic-related services for Governments.

Finally, Vifor makes products for iron deficiency and nephrology (renal/kidney care). They rely on plasma and blood collections to perform their primary businesses and acquisitions are increasingly part of the CSL business.

Technically this over 4 years of sideways consolidation has been a drain on investors’ patience. It has been dragging on since February 2020 so it really hasn’t been a great time to have capital tied up in the stock. Mind you, if you are longer-term investor who rode the Wave-3 north from well lower, then the dividend may have kept you happy while this longer-term breather has been playing out.

The good news though is that there is now a chance that this Wave-4 corrective phase has finally drawn to a close. As you can see on our weekly chart tonight we’ve labelled the move off the Wave-4 low as potentially being a wave-(i) of 5 with the more immediate breather being a wave-(ii).

So if things can continue to hold together with price staying relatively shallow and not heading back to the lower boundaries of the larger descending triangle pattern again, then a swing higher above $306.42 may provide the technical catalyst for a new breed of buyers to get involved. Steady she goes for now but it is back on our radar.

TRADING STRATEGY

If this immediate pullback throughout 2024 does not head too much deeper as stated, then a trade above the proposed wave-(i) high circa $306.42 may be an excellent opportunity that finally sees price action break out into new all-time highs and potentially travel well beyond. No formal recommendation for now yet we will keep a close eye on it.

Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).

This report may contain advice that has been prepared by The Chartist Pty Ltd (ABN 40 641 323 051). The Chartist Pty Ltd is a Corporate Authorised Representative (CAR No. 1282007) of Shartru Wealth Management Pty Ltd ABN 46 158 536 871, AFSL 422409. Any advice is considered general advice and has been prepared without taking into account your objectives, financial situation or needs. Because of that, before acting on this advice you should therefore consider the appropriateness of the advice having regard to your situation and your own objectives, financial situation and needs. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. If the advice relates to the acquisition, or possible acquisition, of a product (other than a security e.g. a CFD) then the client should obtain the relevant Product Disclosure Document and consider it before making any decision about whether to acquire the product. Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.

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