Resolute Mining Shares Ready To Rally

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This story features RESOLUTE MINING LIMITED.
For more info SHARE ANALYSIS: RSG
The company is included in ASX200, ASX300 and ALL-ORDS

Resolute Mining appears poised for a bullish breakout, Fairmont Equities' Michael Gable reports, with tightening price action and improving momentum supporting further upside potential.

By Michael Gable

It still seems comical that talks of a “deal” between the US and Iran still dominate the headlines when Iran doesn’t need any deal right now.

The Strait of Hormuz is their trump card. They can sit this thing out for as long as they want – preferably to that point very soon when panic hits the oil markets.

Taking approximately -12m barrels of oil out of the system every day will show up very soon because draining strategic reserves can only prop up the price for so long.

A clear trend has emerged these past few months; the price of oil drops on news of a “deal”, only for it to bounce right back.

This trend will break when oil stops dropping the way it has been and it just starts moving higher. We are getting closer to that point and still reiterate our view that any dip is a buying opportunity.

Also in the energy space, an explosion at a coal mine in China is focusing attention on coal stocks again.

We have been bullish on coal stocks for a while and now that we have this war with Iran, we have become more bullish as countries like Japan, Korea, and Germany increase their reliance on coal-fired power.

Not only that, but China is also speeding up plans to build new coal power plants. All of this is coming at a time when supply is limited.

Today, we offer a technical view on Resolute Mining ((RSG)).

After peaking in early March, Resolute shares then eased back to consolidate.

The range is tightening up and it is once again testing the short-term downtrend line.

Price action looks encouraging, so it is probably just a matter of time until it breaks out of this consolidation and trends higher again.

Resolute is a buy here for those willing to get in early, and initial stops can be considered near $1.50.

More conservative traders may wish to wait for a daily close above $1.40 before entering the trade.

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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