What’s Happening to the Share Price of AP Eagers Ltd?

What does AP Eagers Ltd do?

This is a follow up to a posting I made on AP Eagers Ltd [ASX:APE] on 25 May, which you can see here.

If you missed that post, this company owns and operates car dealerships in most states of Australia.

In 65% of their dealership sites, they also own the land underneath — so APE owns some prime real estate across the country. This places them well in the current real estate cycle.

Anyway, what is the chart telling us?

What does the chart look like?

I find it helpful to bring up a chart. The daily chart of APE this time.

AP Eagers July

Source: STEX

Whilst most of the general market got sold down over June and early July, APE held a line and failed to break lows. This indicates the company was in a strong position.

What now for APE shares?

The chart is breaking into new highs, it’s having another big day reaching a high of $10.89 at the time of writing.

This is telling you in advance that car purchases are up. The company released strong revenue figures for FY 2015. We could expect the same for the first half of the new financial year.

More broadly, we can use this company as a barometer of sorts for the general health of the economy.

A car purchase is a big ticket item. It is a purchase that signifies some confidence in your own job and the general economy. Car purchases are up and this does not gel with a waning economy.

Stop reading the economy through the financial press, much of it is misleading. You’ll find it of far greater value, to read the economy through the charts. You can get started here.
Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

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Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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