Over recent weeks we’ve watched money flow into defensive yield names such as Sydney Airports, Transurban & GPT to name a few. Telstra has somewhat been left behind and we therefore may see buying support build from the current oversold levels.
We’ve focused on the short-term chart patterns in both TLS and TPM as a point of interest. Also, we’ve included a chart of the iShares Global Telco ETF to help capture the “bigger picture” trend within the large cap global Telco companies overall share price performance.
The Algo Engine triggered a sell signal in Transurban (TCL) yesterday at $11.72.
The stock has rallied over $1.00 since last week’s announcement that tolls to pay for an upgrade of the Inner City By-Pass in Brisbane.
From a broader perspective, TCL has traded between the $12.65 high made in August, and the low of of $9.45 posted in early November.
The $11.72 level is a bit higher than the 50% retracment of of this range, but we see stiff chart resistance at $12.00. We see the first level of support in the $10.80 area.
We own TCL in client portfolios from lower levels and we’ve been bullish in recent weeks on TCL and utilities, in general. This view has been predicated on the faltering backdrop for the the global relation trade.
The rally in TCL will soon stall at near $12.00 and investors should sell call options into September, with a view towards maintaining exposure to the upcoming $0.25 dividend in June.