Likes
They might be busy but three of our analysts have shared their likes and dislikes today. First up we have CMC Markets’ Michael McCarthy. He likes Rio (RIO).
“The 20% slide in share price since mid-June is, in my view, a chance to add this globally significant miner to the portfolio,” he explains.
Our chartist, Gary Stone, from Share Wealth Systems likes QBE Insurance Group (QBE).
He says that the QBE share price has once again found support, with buyers moving in at the long-standing $9.25 to $10 support zone (see below).
“There will be some minor resistance around the $11.20 area but it appears that QBE is heading towards its next major resistance zone of $12.70 to $13.10,” Gary says.
Julia Lee from Bell Direct likes Kogan (KGN) following a sell off on jittery investors around the founder’s attempts to sell down stock and recent revenue guidance.
“With the share price down 40% in the last quarter, this is looking like an overreaction on the downside. Kogan is benefitting from the structural shift from bricks to clicks,” Julia says.
Dislikes
Michael doesn’t like Telstra (TLS) and suggests that the post-result rally is an opportunity for shareholders to bail out.
“A fall in full year profit and declining margins are enough to keep me away from Telstra.”
Chartist Gary doesn’t like Insurance Australia Group after its share price fell below the important support zone of $7.85 – 7.95 last week (see below).
After a strong run-up from around $5.20, IAG’s share price appears now to be heading for a breather.
“The next support zone is the $7.30 to $7.40 zone, which coincides with a 38.2% retracement of that runup. However, there is a possibility, given the degree of recent selling pressure, that IAG could head for a 50% retracement, which coincides with the $6.90 to $7.15 support zone,” Gary explains.
And finally Julia does not like Galaxy Resources (GXY) or Orocobre Limited (ORE).
The battery theme was an easy one to play in 2017 but this year prices have been falling.
“Cobalt prices are down 30% from mid March and Lithium Carbonate in China is down 40% in the same time,” Julia says.
“China’s fall in lithium price is yet to significantly hit the US but is likely to and with China’s subsidies impacting on electric vehicle output, there doesn’t appear to be any short term catalysts to turn things around. With the underlying Lithium Carbonate price unlikely to recover soon, there seems few reasons to be in the battery space at the moment.”
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.
