AGL to Form Double Bottom Before 19.5% Run To 24.15 By Year End
Bullish divergence between A/D and price trend and some massive buy orders a week ago hints that we are nearly done retracing. It looks like we definitely found a bottom on 20th of April, though I think we will retest it and form a double bottom reversal before our next bull run.
Some additional points - We have already tested the 23.6% Fib multiple times and failed to break through. This combined with the fact that we are currently trading within a symmetrical triangle (which 75% of the time act as a continuation pattern) further strengthens my view that we will break out to the down side of the symmetrical triangle and form the double bottom. From here we will bounce back up and briefly retrace slightly close to the apex of the triangle, before moving further up to test the 23.6% fib one last time and then finally break through. The drive from the small retrace from the apex of the symmetrical triangle to the test of the 23.6% Fib will come from the September year end results (it is noticeable that we have had a bull run from around September to Mid-late December in previous years and as we know history often repeats).
Fundamentals look positive in terms of likely record year on year profit. Lower spot prices and lower volatility have assisted in the wholesale side of the business. Retail markets may however see increased pressure due to recent price decreases for NSW, QLD, SA; however continued investment in lower cost digital channels for both CX and Sales etc should help reduce OPEX. AGL did not lower their price as much as Origin either so provided AGL can manage churn then they should be in a relatively stronger position.
I think it is definitely possible to see $24 by year end. I will be waiting to see if we form the double bottom first and then buy at around $20.20 with a view to go long to around $24.15 and then re-assess. This would represent a 19.55% profit.
Some additional points - We have already tested the 23.6% Fib multiple times and failed to break through. This combined with the fact that we are currently trading within a symmetrical triangle (which 75% of the time act as a continuation pattern) further strengthens my view that we will break out to the down side of the symmetrical triangle and form the double bottom. From here we will bounce back up and briefly retrace slightly close to the apex of the triangle, before moving further up to test the 23.6% fib one last time and then finally break through. The drive from the small retrace from the apex of the symmetrical triangle to the test of the 23.6% Fib will come from the September year end results (it is noticeable that we have had a bull run from around September to Mid-late December in previous years and as we know history often repeats).
Fundamentals look positive in terms of likely record year on year profit. Lower spot prices and lower volatility have assisted in the wholesale side of the business. Retail markets may however see increased pressure due to recent price decreases for NSW, QLD, SA; however continued investment in lower cost digital channels for both CX and Sales etc should help reduce OPEX. AGL did not lower their price as much as Origin either so provided AGL can manage churn then they should be in a relatively stronger position.
I think it is definitely possible to see $24 by year end. I will be waiting to see if we form the double bottom first and then buy at around $20.20 with a view to go long to around $24.15 and then re-assess. This would represent a 19.55% profit.