Chart Review for CSL after recent falls in the share-price.

Disclaimer

This post focuses on recent chart changes, suggesting a change in trend. They should be viewed in the context of other company information, and readers should seek professional investment advice before making portfolio changes.

Profile   http://www.moneymorning.com.au/20140801/csl-limited-share-price-price-fell-today.html

CSL Limited [ASX: CSL] is a biopharmaceutical company involved in research, manufacturing and product marketing. CSL develops a range of products to treat viral and bacterial illnesses, bleeding disorders and coagulation disorders such as blood clotting.

The Big Picture

This monthly chart shows the short-term averages loosing momentum, turning over and converging, after an amazing two and a half-year rise from $30

The medium-term averages are still diverging, and rising but with reduced momentum.

 

Rarely looks back

Rarely looks back

 

The weekly Chart

CSL Wk MMA 0814

 

Daily Chart

Support broken

Support broken

Observations

  • In the first half of this year (2014), a Head and Shoulders pattern has formed, with support at $66.30.
  • The head high was at $72.82
  • Since this peak, there have been two lower highs and three lower lows, indicating transition to a down-trend.
  • On Friday August 1, the share-price broke this support, and fell to $65.35 at the close. On this basis traders should exit.
  • The next support level is about $63, and could be tested in trading later this coming week.
  • Note that the monthly chart still shows CSL as being a Buy for investors.

Another Perspective on this fall   http://www.moneymorning.com.au/20140801/csl-limited-share-price-price-fell-today.html

CSL closed down on Friday 3.48%

Why Did This Happen to CSL Shares?

On Thursday night our time, the DOW in America fell a whopping 317 points. The S&P 500 dropped 2%, and the NASDAQ was 2.1% lower — all on the assumption that the Federal Reserve Bank will raise interest rates soon.

The Dow Jones US Biotechnology Index was down 2.38% overnight as well.

That sort of market sentiment is hard to escape.

Most of CSL revenue comes from markets like Germany and America.

What Now For CSL Limited?

CSL has been in a strong uptrend since early 2012. In that time, the share price has risen from $31 per share to $72. It has seen some selling pressure so far this year.

It’s currently trading at $65.

CSL has numerous products in the pipeline. CSL is increasing research and development spending by 13% in 2014.

If there is a longer sell off in the market, there would be very little technical support for CSL. Another bad day in America could drive the share price as low as $62 in the short term.
However, long term, this is a solid defensive company to own. This sell-off could present a buying opportunity.

Shae Smith
Editor, Money Weekend

 

Key fundamental metric (Commsec)

  • P/E ratio  = 21.87
  • Dividend Yield = 1.8%, Unfranked. Pay-out ratio is 42%
  • Debt / Equity ratio = 55.8%
  • Return on Equity = 40.4%

Conclusion

It is in a long-term portfolio. I may add to my position when the price rebounds (if it does)



Categories: Chart Analyses, Trading opinion

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