Xero provides a cloud-based accounting software platform for small and medium-sized businesses. It is a New Zealand company that’s been listed in Australia for several years now. “The business is similar to other technology companies in that it has been experiencing rapid growth and trades at a very high valuation,” Michael said.
“One key advantage though is that Xero is actually turning a profit.
“Its share price has had a stellar run over the last several years, and it peaked in December, hitting levels over $150.
“Since then, we’ve seen a softening in the share price, however, I can see that the stock has merely been trading sideways during this time within a tightening range.
“This means that for the last several months, XRO’s share price was just taking a breather and it will only be a matter of time until it starts heading higher again.
“In the last few days we’ve seen some signs that it’s breaking free of this range (circled on the chart).
“This means that we could now be seeing the start of a new uptrend in XRO shares which should lead it on to new highs,” Michael concluded.
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