MoneyTechs is Stockhead\u2019s regular technical deep dive into some of the ASX stocks, sectors and trends of the moment with devout technical analyst Michael Gable, the Managing Director and Founder of Fairmont Equities.<\/p>\n
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First up, you\u2019ll want to be across Michael\u2019s investment model which is a melange of both technical and fundamental analysis.<\/p>\n
Then there\u2019s his rules of engagement:<\/p>\n
We are active.<\/em><\/p>\n We cut positions quickly if they head the wrong way.<\/em><\/p>\n We employ rules-based investing which takes the emotion out of our decisions.<\/em><\/p>\n We don\u2019t fall in love with a company. If your threshold reaches a certain level, we will call you and advise you to sell it.<\/em><\/p>\n We use \u2018trailing stops\u2019 to help us stay in winning positions for as long as possible.<\/em><\/p>\n We are not day traders.<\/em><\/p>\n We are not \u201cbuy and hold\u201d.<\/em><\/p>\n We view ourselves as active investors who concentrate on the medium term. That is, we don\u2019t want to be in and out every day.<\/em><\/p>\n We also don\u2019t believe that buying a company today and closing your eyes for a few years will grow your wealth.<\/em><\/p>\n The world changes rapidly and you need to adjust your portfolio accordingly. Today\u2019s market darling is next year\u2019s disaster. Our average holding is in the order of a few months to several months, depending if it\u2019s a core stock or a trading opportunity.<\/em><\/p>\n Entry levels are crucial and it is where money is made. Timing is everything. This means you need to pay attention to what price action is telling you.<\/em><\/p>\n \u201cThis is where a strong understanding of technical analysis is necessary,\u201d he adds.<\/em><\/p>\n \u00a0<\/p>\n So, let\u2019s get down to brass tacks.<\/p>\n Michael says share markets here in and the US continue to look bullish and he still remains of the view that we will see a rally into the end of the year.<\/p>\n \u201cAn interesting development last week was the moves in oil. After falling for a few weeks by nearly 15%, we then saw a 5% decline within one day to bring the oil price near the lower end of its yearly range.\u201d<\/p>\n The reaction to the move by many commentators and analysts is interesting, Michael says.<\/p>\n \u201cEveryone seemed to turn bearish. But it was a classic example of people turning bearish after the worst has already happened.<\/p>\n \u201cWhen you get a big move down after a large decline, then usually that is a sign of capitulation and a low. That seems to be the case here with the oil price bouncing strongly in the past two days.\u201d<\/p>\n \u201cAs a result, we have a chart of Woodside which is worth a moment\u2019s study.\u201d<\/p>\n Michael says that along the same theme, the uranium stocks are starting to move again.<\/p>\n \u201cAlso doing well in the energy space is uranium, surging this week as the price of yellow cake extended its extraordinary 2023.<\/p>\n \u201cPaladin gained 4.00% to $1.04, Bannerman Energy added 3.69% to $2.81, and Deep Yellow added 2.95% to $1.22. We\u2019re partial right now to both Bannerman and Paladin Energy.\u201d \u00a0<\/p>\n Way back in July, Shaw and Partners was out front of the uranium price surge, saying the price action has a lot of legs \u2013 with spot uranium likely to reach and exceed US$80\/lb over the next two years.<\/p>\n There\u2019s not been huge coverage of BMN, and at the time Shaw said that the overall \u2018limitations on transmission, batteries and firming capacity means governments will realise current investment in renewables will not meet decarbonisation objectives.\u2019<\/p>\n \u201cBased upon such factors as uranium price leverage, underlying quality and project lifecycle phase, Shaw and Partners\u2019 preferred exposures from stocks under coverage are Paladin Energy, Silex Systems and Lotus Resources.\u201d<\/p>\n However while Bannerman Energy is the most leveraged play to the uranium price under the broker\u2019s coverage, BMN\u2019s 95%-owned open pit Etango-8 project in Namibia is \u2018lower grade but higher volume\u2019 compared to its peers. The broker Upgraded BMN to Buy from Hold, with a target price of $3.20.<\/p>\n \u00a0<\/p>\n Via Fairmont Equities<\/p>\n Michael says Fairmont noted the buying opportunity for BMN back on August 8 when it was trading at $1.66.<\/p>\n \u201cAfter rallying to nearly $3.00 by the end of September, it then spent several weeks correcting the move.\u201d<\/p>\n \u00a0<\/p>\n Via Fairmont Equities<\/em><\/p>\n \u201cWe can now see that this corrective move resembles a bull flag (diagonal blue lines). <\/em>The stock is now breaking out of this bull flag (circled)<\/em> on good volume.<\/p>\n \u201cThis means we have another buying opportunity<\/strong><\/em> as we expect the shares to now continue their recent uptrend.\u201d<\/p>\n \u00a0<\/p>\n At the end of October, Paladin reported in its quarterly update that Langer Heinrich is 80% complete for restart, on time and on budget, and the company is well capitalised.<\/p>\n Paladin has also just moved to 100% ownership of the Michelin Uranium Project in Labrador, Canada and according to the brokers at Shaw and Partners, this now clears the way for Paladin to advance the project.<\/p>\n Shaw says they expect PDN to move pretty quickly on this.<\/p>\n Shaw says PDN \u2018is the premium and most liquid name in the sector\u2019 and remains the broker\u2019s preferred exposure to an improving uranium market. The Rating is a Buy and Shaw retains its $1.15 price target.<\/p>\n Via Fairmont Equities<\/em><\/p>\n \u00a0<\/p>\n Michael says, \u2018we looked at the longer-term chart of PDN in September and noted that it looked bullish and was set for a multi-month rally, although it was likely to dip first in the short term.\u2019<\/p>\n \u00a0<\/p>\n Via Fairmont Equities<\/p>\n \u201cThat short-term dip appears to be over and we have a new buying opportunity.<\/strong> \u00a0<\/em>The shares spent some time cooling off, forming a double bottom (arrows)<\/em>.<\/p>\n \u201cIt then gapped up to leave the recent range, which was the first sign that it was on the move again. It found some short-term resistance, but it is likely to move beyond that to prove that it is on the way back up.<\/p>\n \u201cIf that is the case, then traders should consider that as the buy signal<\/strong><\/em> and PDN should then move to new highs for the year.\u201d<\/p>\n \u00a0<\/p>\n On Tuesday, the brokers at Macquarie Bank lowered the profit outlook for WDS after significantly bumping depreciation and amortisation for the company\u2019s Sangomar and Trion projects to fully reflect write-off of initial investment over proven reserve production lives \u2013 which is eight years for Sangomar, and 13 for Trion.<\/p>\n The broker has retained its Neutral rating for WDS and the $32.00 price target, but has subsequently lowered the dividend outlook.<\/p>\n MQG adds that they expect more \u2018material declines\u2019 in production at Woodside\u2019s North West Shelf offshore project.<\/p>\n \u00a0<\/p>\n Via Fairmont Equities<\/p>\n \u00a0<\/p>\n However, Michael says the recent pullback in WDS \u201caccelerated in the past few weeks which saw the stock become oversold and it retested the March low.\u201d<\/p>\n \u00a0<\/p>\n Via Fairmont Equities<\/em><\/p>\n \u201cOn cue, we got a buy signal on the RSI<\/em> <\/strong>and a spike in volumes off the low.<\/p>\n \u201cWDS gapped up yesterday and we now have a clear reversal in the stock. WDS tends to bounce in a V-shape so a recovery from here should be swift.<\/p>\n \u201cCurrent levels are a buying opportunity.\u201d<\/strong><\/em><\/p>\n \u00a0<\/p>\n The views, information, or opinions expressed in the interview in this article are solely those of the writer and do not represent the views of Stockhead.<\/em><\/p>\n Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.<\/em><\/p>\n <\/span><\/p>\n The post MoneyTechs: Don\u2019t go full bear after the porridge has gone<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"What the technicals are saying this week<\/h2>\n
\n\u00a0<\/p>\n3 instant ASX energy opportunities<\/h2>\n
Bannerman Energy (ASX:BMN)<\/strong><\/a>: Breaking out of its bull flag<\/em><\/h2>\n
Paladin Energy (ASX:PDN)<\/strong><\/a>: On the move again<\/em><\/h2>\n
Woodside Energy Group (ASX:WDS)<\/strong><\/a>: A clear reversal<\/strong> <\/em><\/h2>\n