Australian Agricultural Company Limited (AAC.ASX)

22 November 2017



Technical Summary: AAC highlights the risk of buying stocks that are camped below their 50 day moving average. These stocks are more prone to sells offs. This has happened recently with the stock as it has broken down on significant selling volume. On the 5 year chart the stock does not find any support until $1.10 and therefore is not buyable here from a trend perspective or a mean reversion perspective. It would only be buyable here if you felt the intrinsic value of the company was trading above its current stock price. Most of recent losses could have been avoided by investors that used at least a modicum of
risk management. For example the 50 day simple moving average could have been used as a stop loss (highlighted).

Stock camping below its 50 day moving average has now pitched its tent.

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