Telstra: Next target $5?
A result on Thursday that is absent of any nasty surprises could see Telstra rally towards our next target of $5. The Telstra chart has been an easy one to read in the last couple of years.
We had been negative on the stock for much of the last few years, but suggested back in April that it should finally bounce at $4. From the peak in 2015, Telstra had fallen in 5 waves. According to Elliott Wave theory, this means that it has finished the downwards move. We also noticed that $4 represented some strong Fibonacci support.
In our commentary for Livewire in April, we forecast a bounce to $4.50. After hitting that number exactly, Telstra then proceeded to pull back. However, Telstra still looks bullish, despite falling back from that $4.50 peak in May. The last few weeks have seen Telstra hold above $4. The strength of this support means that I have been happy to buy back in for clients at these levels.
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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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