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Hot stocks – AMP out!

 Likes

This week CMC Markets’ Michael McCarthy likes Australian Agricultural Company (AAC).

“I see strong technical and fundamental reasons to buy AAC. In particular the trade cycle is turning and in my view AAC could reap enormous benefit. Think it unlikely to remain at four year lows for long,” he says.

Bell Direct’s Julia Lee likes Webjet (WEB).

“This is a company with strong organic growth,” she says.

EBITDA guidance for FY18 is at least $80 million and three-year targets for bookings growth of three times the underlying growth rate in B2C, and five times the underlying growth rate in B2B.

“These are impressive targets from a company that has a track record of delivering,” she says.

And although it was his dislike last week, the bounce off the support zone and the ATR breakout have changed the situation for Transurban (TCL) for our chartist Gary Stone of Share Wealth Systems.

 

 

Here’s how Gary explains it.

For the last two years since May 2016, the Transurban share price has been caught in a sideways consolidation pattern between the upper resistance zone of $12.50 to $13.00 (top blue rectangle) and lower support zone of $9.25 to $9.45 (lower blue rectangle). Since July 2017 the area between $11.00 and $11.35 has become a strong support zone (middle blue rectangle) and it is from this zone that the Transurban share price has bounced over the last month.

This zone coincides with the lower red channel trend line, where the technical analysis ATR Trailing Stop indicator (black line) signalled a breakout entry last Friday 27th April.

This combination of charting evidence could see the Transurban share price rise to the upper resistance zone of the sideways consolidation pattern between $12.50 and $13. The more often this resistance zone gets tested, the higher the probability that a break-through will occur to a new all-time high when TCL should continue its controlling trend between the red channel lines.

Dislikes

Julia does not like AMP.

“Short to medium term will be around working through issues: new board, new CEO, potential for further compensation to clients, advisor losses, net out flows and possible class action/legal action. Given the medium term challenges, no reason to jump into this stock even at these levels,” she says.

And Michael agrees. He says AMP has not done much to correct the situation.

“More resignations and significant regulatory sanctions are a real possibility. In my opinion further falls are likely and the stock cannot be considered good value while these issues are unresolved,” he says.

Gary doesn’t like Telstra and says it is still very much in a strong down trend.

“The next support zone is at $2.90 to $3.00, which is where Telstra looks like it is heading before its price decline takes a breather,” he says.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.