This week, Michael McCarthy from CMC Markets likes Bendigo and Adelaide Bank (BEN).
“The regional bank’s “Local Connection” business may be a big winner from any Royal Commission fall out, and the upswing in rural Australia may support its agribusiness. At close to $10 per share, it’s more attractive than the 2017 highs around $12.50,” he says.
And for a contrarian view on Wesfarmers, our chartist Gary Stone from Share Wealth Systems likes the company at these prices
“Wesfarmers share price broke out to a new all-time high last week after oscillating up and down in a five-year trading range between $38 and $46. This is a high probability event that, in the first instance, would typically see Wesfarmer’s share price retrace in the short term to retest its previous resistance zone of $44 to $46. However, given the long consolidation period of five years, it may just keep rising and develop a juicy uptrend such as seen on the left side of the chart.”
Michael McCarthy doesn’t like Blackmores (BKL) and believes the share price is faltering despite a consensus forecast of 16% long-term growth.
“At a PE of 35 times, any missteps could hurt shareholders badly, and competition (especially in China) is revving up. I’m a seller on risk/reward basis,” he says.
Gary doesn’t like Ramsay Health Care (RHC).
“Ramsay’s share price is still in a strong downtrend. A reversal of this trend is a low probability outcome for the time being, given that RHC’s share price has just fallen below a key support zone between $59 and $61. Last week saw RHC rise to retest this zone, which has now become a resistance zone. The odds are that this test will fail and RHC’s share price will move towards the lower black channel line around $53 to $54.”
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