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Downer EDI Limited (ASX:DOW) is Wealth Within senior analyst Fil Tortevski and analyst Pedro Banales’ pick for the HotCopper Hot Stock tip this week, with the infrastructure services company finding a “very strong base.”
Basically, the Wealth Within duo agreed, it could be time to strike.
“[Downer] seems to find a way to hold at its very strong base at around $2.90,” Mr Tortevski explained, “and as you can see throughout its history that has been so important.”
Every time it lands around there, he said, it comes out slow, steady – and importantly, up.
“What we’ve seen is a steady, stable rate of rise,” he continued. “There’s sustainability here in the stock and the stock wants to move higher. We’re not seeing a wish-wash in price that really leans into that [bad] instability.”
Mr Banales added: “If you were more conservative you may take a position once it breaks $6 but you could argue for… an entry around $5.44 with a safe stop loss.
“I could justify an entry around there – if you wait until it breaks the higher then you’ll only have around 14% until you reach critical levels. Weigh up what type of trader you are and decide if you want to go short term, medium term.”
Downer last traded at $5.65 after a 2.9% gain on Tuesday.
Proceed With Caution
Debt chaser Credit Corp Group (ASX:CCP) is the stock you should “proceed with caution” on this week, Mr Tortevski and Mr Banales agreed – while the company is down, an unfortunate “record cost of living crisis” may see more and more people default on debt sooner rather than later to give CCP more business.
Credit Corp Group last traded at $17.34 through the afternoon.
Not Hot
Finally, Premier Investments (ASX:PMV) was the pair’s “Not Hot” pick; while the retail fashion operator has been in the headlines recently through its Myer Holdings (ASX:MYR) merger, things have headed south quickly.
Mr Banales added he may start looking at it again when it becomes “viable” closer to $24, but right now neither Wealth Within analyst will be going near this one.
Today, PMV shares have been selling at around $28.76.
This show comes in the lead-up to Wealth Within’s live YouTube show tonight at 7pm AEDT.
You can join conversations on Wealth Within’s tips on HotCopper here.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He’s also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.
Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347) the information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.
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