Likes
This week Michael McCarthy of CMC Markets likes A2 Milk (A2M).
“The pullback on news Nestle will increase competition, is in my view an overreaction and a rare pull back buying opportunity in this market darling,” he says.
A2M was a favourite of Michael’s back in March too when he said it had the best result of the season. https://switzersuperreport.com.au/hot-stocks-a2milk-and-cba-hybrid/ [1]
Our chartist, Gary Stone from Share Wealth Systems like Computershare (CPU). He says it has held up well in light of the recent market volatility, which is an encouraging sign against broad market weakness.
“Recent zones of resistance at around the $17.00 level, now appear to be acting as zones of support, and as such, represent a lower risk entry. Protective stops can be placed below the support level in the zone $16.80 to $16.93, with the first target being its recent all time high of $18.36 and then $20 should the first target be achieved.”
Dislikes
Michael doesn’t like Flight Centre (FLT), which he says is currently stalling near the all-time highs.
“It’s a well-run company but far too expensive in my view, 21 times earnings for low single digit growth means it’s time to consider locking in gains in Flight Centre,” he explains.
Gary doesn’t like Telstra (TLS).
“After testing the $3.30-3.40 support zone several weeks ago, it has now fallen through that level. Once this occurs it is common for the price to rally back and test that previous level. A sure sign of weakness is when that rally is met with heavy selling that pushes the price to lower and lower levels,” he says.
“The next downside target is for the $3.00 level, and if that doesn’t hold, then eventually a full retracement of its 2010-2015 rally back down to $2.50 is certainly a possibility. Telstra is yet to establish a clear level of support and until that happens the jury is well and truly out.”
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