ARB has continued to rise in its price channel range and if it can close above $54 it could have a target of $62.30

ARB 3Dec21

6 October 2021

ARB has rocketed up since the start of Covid. As a long time member of the 4X4 community (both for pleasure and as an occasional freelance writer of remote travel articles for a national magazine) I can understand this. Lockdown has been a time for many to review their 4X4 gear. Many more have decided if they can't travel overseas then they will do it locally - hence the 12 month wait for a caravan (despite them being built locally). In fact, getting on as we are, my wife bought a van which we've just taken delivery of but had to buy a replacement tow vehicle as the Prado 4X4 we owned wasn't up to the job. If you are well off you can buy a Landcruiser for just shy of $100K but many opt for a new or good used ute for half the price. Mine has what I regard as the minimum options added for remote travel and they set me back over $12,000 - and if planning extreme 4X4 travel without a van then you could easily double that for the extra addons that requires. Now I didn't buy ARB (apart from the canopy) because I know I can get equivalent equipment from places like Ironman more cheaply. However, many older Australians with little touring knowledge but plenty of cash are just going for known names or relying on their dealer - and ARB is the best known name around.

ARB's chart history is pretty much doing little until Covid. Can it continue its rate of share price income? In my book, no, because it has risen too much, too quickly and will need to take a breather soon. The chart shows a rising price channel and price almost always breaks down out of those channels eventually. A trade now would be high risk but price has bounced off the lower price channel boundary to rise back to the top boundary 4 times since March 2020. Now close to that lower boundary, will it do it again? Price looks to be trying to break above ressitance at $48 and should it do that (and history repeats) it will make a potential target of $62.
Price is just above the lower channel boundary and while that boundary isn't a magical line in the sand I wouldn't be suprised to see price test and possibly retest that boundary before moving higher (if it doesn't capitulate and fall out of bed).
High risk but good potential profit if it plays out.

As for ARB's products and profits, my personal feeling is that with borders likely to be opened in the next month or two I'd say product is flying out their doors as cabin fever reaches its zenith. However, once the gates are open I suspect the vast majority of new recreational vehicle users will be on the roads and the level of ARB sales will fall away. One of the reasons why ARB's price has been historically fairly flat is that the products they sell are often good for the vehicles lifetime - ie they never need to be replaced or updated (apart from suspension components). So perhaps not a long term hold?

I've never traded ARB despite my knowledge of the industry. I always felt their rapid growth wasn't in keeping with their historical performance and unsustainable. There have been several buy opportunities but you can't keep in touch with every share on the ASX and perhaps I just never looked at it at the right time. I am sorely tempted (despite the ASX potentially correcting). Perhaps if price breaks above $49.60 to make a higher weekly peak..........

ARB 6Oct21


Robert Norman

Phone: 0428 346 951

Sorry, this website uses features that your browser doesn’t support. Upgrade to a newer version of Firefox, Chrome, Safari, or Edge and you’ll be all set.