AGL Energy’s Bull Flag A Positive Signal

This story features AGL ENERGY LIMITED. For more info SHARE ANALYSIS: AGL

The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

By Michael Gable 

Share markets are seeing some of the quickest declines outside of covid, the GFC, and the Great Depression. But due to what? A press conference? If a press conference can cause this, then a press conference can fix it.

Could Trump just as quickly announce some amendments to his plan, show the world that countries are buckling under his supreme negotiation skills and provide proof that he is “winning”?

If he delays demonstrating any amendments to his tariff’s plan, then like in previous market crashes, the US Fed may inject liquidity to calm markets. Either way, markets can bounce back ferociously.

Unlike previous market crashes, there is nothing fundamentally here in place that needs a long time to be fixed. Initially we had bond yields falling as a result of “Liberation Day”. But as of last night, they are climbing again.

Trump needs to get to a stage later this year where interest rates are low, the US has some better trade deals, and, most importantly for us, markets are calm and heading higher. He needs this for the 2026 mid-terms.

The current confusion will therefore have to give way to a bit more logic and those panicking now will calm down.

As a result, I expect a relief rally pretty soon, possibly in the next day or so. The question is, after that relief rally, where to go from there?

Investing and building a business requires confidence. Will businesses and investors fully regain their confidence in Trump? If the path that the US is going down becomes more uncertain, for a range of reasons not just tariffs, then what does that mean for stocks?

Will investors rotate from businesses with uncertain futures to those that are cheaper and more dependable for a while?

Gold has been rallying for a year now. Since we identified that breakout 12 months ago, it has trended strongly and we have reason to believe it will continue to do well.

It is also worth paying attention to what happens with other hard assets in the next few months, whether they are start to see some strong inflows. For now, we expect markets to react positively to any news this week that calms the nerves and we should see a bounce.

From there we can reassess. Ultimately, we can analyse it all until the cows come home, but if markets are going to be harder this year, then the solution is less analysis, not more.

It will be to follow the trends and run trailing stops, regardless of your views or what the business does.

Today we offer a technical view on AGL Energy ((AGL))

AGL appears to be forming a bull-flag (diagonal blue lines) under the 2023 high, which is a positive sign.

If it can hold onto this $10 level and move to the top of this flag, then we have a high chance that it will be getting ready for a breakout.

A break above $12 could then see it move to the next resistance level near $14. We don’t want to see a weekly close under $10.

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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