Our next selling opportunity

Michael Gable

Fairmont Equities

We had a story here a month ago in Livewire about Suncorp. The article was titled “Is Suncorp about to be a great shorting opportunity?”. At time of writing, the stock is down over 8% since then and today’s sell-off suggests that there is further to fall. We have recently bought some put options in another top 20 stock with a view to take advantage of a falling share price.

It may not have the same profit potential for us as shorting Suncorp, but NAB seems to be struggling here. Of the big 4 banks, NAB is like the wounded Gazelle – its recent share price performance lagging behind the pack. After peaking in May and then falling, NAB then failed to bounce as well as the other big 4 banks. You will notice on this chart that it can only rally back up towards the 38.2% retracement level. This leads us to believe that since falling from the peak in May, NAB is going to make a 5-wave decline. This bounce from the last few weeks in NAB therefore looks like a "wave 4". This means that NAB is likely to make a 5th wave by falling from here and making a new low in the $28's. It may not be a huge move, but one worth considering when it comes to buying puts or hedging your stock position with covered calls.

Any advice is general only. Fairmont Equities uniquely combines both fundamental and technical analysis. Visit our website for a free trial to our research, request a free portfolio review, and to access our free blog and educational videos.


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Michael Gable
Michael Gable
Managing Director
Fairmont Equities

Michael Gable is managing director of Fairmont Equities. We are a small boutique advisory that uniquely combines both fundamental and technical analysis. As a result, our analysis is featured regularly in the finance media such as the Australian...

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