“Interest rate cuts in the US and the prospect of cuts in Australia is causing some renewed interest in retail stocks,” Michael said.
“Having said that, are rallies in the share prices of retailers now overdone, or do these stocks have further upside?
“HVN in particular looks very interesting here and could offer investors quite a bit more upside.
“We have noticed that HVN is consolidating (see the circled area in the chart below) under the March high and it therefore appears to be preparing for another rally higher.
“This is because any selling at such an obvious point is not able to drive the share price lower. It means that buyers are stepping in here as well, and the next result is this sideways movement. “Once the sellers are done trying to get out, HVN will be free to rally up to much higher levels. “HVN is therefore a buy here.
“The March high at $5.15 should only offer light resistance and the next major line of resistance is just above $5.50,” Michael said.
Harvey Norman (HVN)
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