Momentum Building For Brazilian Rare Earths

Array
(
    [0] => Array
        (
            [0] => ((BRE))
        )

    [1] => Array
        (
            [0] => BRE
        )

)

This story features BRAZILIAN RARE EARTHS LIMITED.
For more info SHARE ANALYSIS: BRE
The company is included in ALL-ORDS

Shares in Brazilian Rare Earths are showing strong technical resilience near previous highs. Fairmont Equities' Michael Gable believes a breakout above $6.00 could trigger a fresh upward trend despite broader market weakness.

By Michael Gable

By Michael Gable 

The vertical move higher in US markets may be hitting a long-term resistance line here, and with market breadth looking poor, it might cool off a little.

The Australian market remains range-bound and it shows it is hard for our market to trend when heavyweights like the banks and CSL can’t contribute to the heavy lifting that is being done by stocks like BHP Group and Rio Tinto.

The big miners bursting to new highs is a positive sign and we continue to see these stocks as opportunities and investors should avoid the temptation to sell these and rotate into the stocks which are trending lower.

The most crowded trade out there is US tech and this means getting exposure up at this point leaves very little room to make a decent return over the next few years.

With commodities still in the early stage of the bull run, the most explosive phase will be when we get an eventual rotation out of tech and into hard assets. Remember, falling share prices in tech stocks doesn’t mean that AI isn’t a real thing, just as the dot.com bust didn’t mean no more internet.

The better risk/reward to profit from the growth of AI at this point, in our opinion, is through the companies that provide the raw materials, which are short in supply.

Today, we offer a technical view on Brazilian Rare Earths ((BRE))

Since peaking in October, Brazilian Rare Earths has essentially traded sideways, forming a large rounded low.

It has tested the old high on a couple of occasions now and it is a good sign to see the stock holding up at these levels despite the broader market weakness.

This means there is a good chance that Brazilian Rare Earths is close to breaking to new highs and commencing a new uptrend.

It is therefore a tentative buy here for those willing to run an initial stop near $4.80.

Otherwise, more conservative investors can wait for a close above $6.00 and treat that as the buy trigger.

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.
 

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms