JB Hi-Fi (JBH) is the largest home entertainment retailer in Australia.
“They are one of, if not the, most successful retailers in the country,” Michael said, “however, despite the fundamentals looking very good for the business, there are a couple of factors which are concern.
“The first one is the macro environment. Supply chain pressures and softening demand may weigh on earnings.
“Secondly, the share price chart is showing a distinct lack of buying support for the stock. “For over a year, JBH has been range bound between about $43.50 and $54.
“Several weeks ago, it managed to break above resistance, but it failed straight away and was back into the range. With it failing to then quickly recover, and looking at the way it has started to sharply come back these past several days, the odds are that it heads back towards support near $43.50.
“A break under that level would be a negative sign.
“It therefore looks to be too early to buy JBH shares and investors can be patient for cheaper levels,” Michael concluded.
JB Hi-Fi Limited (JBH)
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