Downside for Telstra's share price

Stock Watch

Fairmont Equities Managing Director Michael Gable takes a technical look at Telstra Corporation (ASX:TLS), Magellan Financial Group (ASX:MFG), Senex Energy (ASX:SXY) & Catapult Group International (ASX:CAT).

Michael Gable:
Good morning. I'm Michael Gable from Fairmont Equities and this is Stock Watch for the Finance News Network on Monday 9th September. If you have a request, please send it through. Any advice is general only, so please consult your finance professional before acting on any advice given here today.

This is a weekly chart of Telstra (ASX:TLS). Obviously, it's had a fantastic run over the last year, but it's become evident that it will struggle to head higher. What I've noticed on the weekly chart is the reversal of a few weeks ago. This is a classic reversal signal. What you have is an uptrend leading into what's known as a hammer formation and then the confirmation of the negative price section after that.

These three candles here basically give you the reversal, and as we can see in the last few weeks, the share price has been struggling, so it wasn't able to quickly recover. It's continued to drift lower. As we could see on a weekly basis, we've got lower highs and lower lows. It looks like this up trend for the moment is over. There is some support, near $3.50, but generally based on the price action and the decent volume on the way down, I'd assume the Telstra share price has further downside ahead.

Moving on, this is a weekly chart of Magellan Financial (ASX:MFG), starting to look pretty good here. It looks like it might go for another run despite the massive rally that it's already had over the last several months. So what I've noticed is we've had this fall away in the share price, of course, like the rest of the market. After bouncing from this level, it came back to make a marginally new low. But it looks like that was a false break because it quickly recovered and then it's shot up to take out that high. All of this, in my opinion, looks pretty good. As long as it can push beyond this low point here, I'd assume that Magellan will continue heading higher. Price section so far looking pretty good.

Senex Energy (ASX:SXY). This is a weekly chart looking really good also. We've had basically a higher low for rally failure at the resistance level. Another higher low and, in the last few weeks, obviously very bullish price action. This resistance level was a major level for Senex to get through, and it did so quite convincingly. Basically, if we take the depth of this range extrapolated up here, we get a target of around 48 cents, which seems to be obvious resistance. I think any sort of dip here as long as it holds above this line is a buying opportunity. I'd be targeting 48 cents.

Finally to your request, this is Catapult (ASX:CAT). I'm a bit neutral on this one in terms of the way it's trading in terms of the positives and negatives. We've had this decent run up here, flag formation, a break, retest, nice rally. But as you could see, price rejection here followed by fairly negative weeks. You don't really want to see that on the breakout. You'd expect it to at least hang in there a bit better. But having said that last week, this weekly candle here looks quite positive. I think as long as the share price holds above this $1.20 region, should be looking okay. As I said, a couple of positive signs coupled with, I guess, a negative couple of weeks there. It makes me a bit neutral on it, but yeah, as long as it holds in here, I think we may well see it continue to climb higher.

Well, that's it for this week. If you have requests, send it through and I'll try to cover it next week for you.


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