WBC has lived up to my suggestion in August of possibly lower prices. Is the bottom in?. Maybe. Price started to make a new weekly uptrend from the March low, but failed by 1 week. Price then fell and having done so for more than 12 weeks it confirms the previous long-term downtrend from 2015 remains in force. The black dashed line on the chart is the potential uptrend and the red dashed line is a new potential downtrend. If this latter downtrend line is correct price has broken above it, which is a technical buy. There is little else in the chart that suggests to me it is a good time to buy. A rise above $20 is needed to suggest a more sustained recovery. As noted below I see the finance sector (and banks particularly) challenged in our virus ruled economy.

WBC 9Oct2020

6 August 2020

Many Mum and Dad investors buy bank shares because of their good dividends and low risk. Although, with dividends under pressure and share price down by 54% from September last year to the recent March low – anyone buying in the last year is likely to be under water.

Bargain hunters might be keen to buy as price looks as if it could have bottomed. However, price hasn’t formally moved to a technical uptrend yet – meaning the probability of further falls is there. To be a buy in my book price needs to break and close for 2 consecutive weeks above the dark black downtrend line which price is tracking just below on the chart below. If price keeps falling back to get below $15 I could see a real possibility of $10.25 on the horizon – so I hope the bottom is in for any recent buyers.

I don’t even watch the banks because they are too hard to trade short term and coming from a banking/finance background I personally see them as more challenged than they have ever been in my memory. Obviously, they are too big to not prosper in the long term so buyers now will probably see capital gains in the coming 12 months – but with the possibility of lower prices still there I’d be waiting for that trend break.

WBC Aug 6 2020


Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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