As shown in the Metastock candlestick chart below, (with ASX data supplied by Paritech), AGL Energy has proved to be an excellent portfolio selection for retail investors, rising from a low of $12.55 on the 12/12/2014, to a high of $28.47 on the 13/04/2017.
However in the past year it has entered into its present primary downtrend. The Fibonacci retracement plot shows that 50% of these gains were forfeited before a welcome rebound emerged at the $20 support/resistance level two weeks ago.
The dilemma for shareholders and would be shareholders, is whether or not it is worth taking the risk of buying into a counter-trend rally, to take advantage of the present price weakness.
From a technical point of view it would seem likely that the price action will now re-enter the trading zone 5, between $23 and $26. It would take an impulsive move upwards to surpass the resistance of the previous high at $26.50 to arrest the down-trend and raise hopes of still higher prices.
It is suggested that those readers contemplating now adding to their portfolio with a new position in AGL shares consult their broker or financial adviser for additional information as to AGL’s future prospects.
Categories: Chart Analyses