Here are 3 dipping ASX shares now ready to rally

Technical analysis shows the best time to enter a position. Here are a trio of suggestions for the current market.

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Of course, the best way to judge whether an ASX share is a good purchase is to examine the company’s fundamentals and future potential.

But if all those signs are positive, it also helps to buy in at a low price.

This is where a technical analysis of stock price movements can help.

Fairmont Equities managing director Michael Gable is a specialist in this area, helping clients to buy ASX shares at the most advantageous time.

This week he revealed 3 stocks that are looking ripe for buying.

Commonwealth Bank’s ‘false break’

As a post-COVID recovery beneficiary, Commonwealth Bank of Australia (ASX: CBA) shares have risen almost 45% in the past 12 months.

However, the middle of June saw the stock’s rise stall at the $100 mark.

“However, instead of taking the higher probability route by falling away to lower levels, it managed to spend the last several weeks trading sideways in a narrow range instead,” said Gable in a memo to clients.

About a fortnight ago CBA shares dipped below $100 suddenly, but this only lasted a couple of days.

“This break of support a couple of weeks ago is, therefore, a ‘false break’ and that is a powerful sign that strong buying support [still] exists for CBA.”

CBA on Tuesday afternoon traded for $101.37. They are now “pushing to the upside”.

“This is, therefore, another buying opportunity and CBA is likely to continue trending higher from here and should be making new highs shortly.”

CSL’s irresistible dip

CSL Limited (ASX: CSL) hit a 2021 high on 18 June, finishing the day at $305.52.

At the time, Gable warned that the rise would reverse in the short term.

“That dip would be the next buying opportunity before it makes another run towards the old high, near $340,” he said on 22 June.

His words proved to be spot on, as CSL shares hit a trough of $275.15 by mid-July. But the ASX stock has since picked up upwards momentum, trading for $294.04 on Tuesday afternoon.

So now is the buying opportunity that he previously predicted.

“The jump [in] CSL a couple of weeks ago looked bullish and the last several days has merely seen it form a flag as it prepares for the next rally,” Gable said this week.

“It, therefore, looks as though CSL is on the move again here and it is likely to make an attempt to break the June high. That would be another buying opportunity.”

This ASX share is ‘ready to rally’

Online luxury goods retailer Cettire Ltd (ASX: CTT) was the darling of the ASX in the first half of the year. But its shares tumbled sharply in June, only to peak again by the end of that month.

The stock started July at $2.77 but on Tuesday afternoon traded at $2.28.

Gable reckons Cettire is “ready to rally again from here”.

“The fall in the share price since the July retest has been a lot slower than the June decline. We have also seen it level out near the June low and then bounce off it, which is a positive,” he said.

“A break of the June high would be the next buy signal.” 

According to Gable, it’s imperative Cettire shares keep their head above $2, to prevent a medium-term malaise.

“Current levels provide a good risk/reward opportunity.”

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Motley Fool contributor Tony Yoo owns shares of CSL Ltd. and Cettire Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. and Cettire Limited. The Motley Fool Australia has recommended Cettire Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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