CBA Shares Find Technical Support

This story features COMMONWEALTH BANK OF AUSTRALIA. For more info SHARE ANALYSIS: CBA

By Michael Gable 

The inevitable bounce in resources, as we have been anticipating, should continue on from here and help drive our market higher.

There has been a lot of talk that this will be at the expense of the banks. Whilst there has been some initial rotation out of banks and some sharp declines, we don’t see investing in resources and banks being an “either/or” situation.

Resources will outperform from here in our opinion, but bank shares can still head higher.

The narrative that it is a pure rotation sounds simple enough, but we have to be skeptical of thinking it is that easy.

Just as analysts were talking down the banks at the start of the year as being too expensive, they are likely to once again be shown to underestimate the buying support that the large four can enjoy from here.

Today, we offer a technical view on CommBank ((CBA)).

We looked at CBA in December and noted that a break above $110 should set it on a new uptrend.

CBA has spent the year trending higher and it seems to be respecting a clear channel. It also seems to find support near the 100-day moving average (dotted line) whenever it pulls back.

Once again, we have seen CBA fall back to trend-line support and this is an opportunity for those looking to enter the stock.

If support does fail here, then the next major level is back near $125.

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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