In the early 2003 AMP hit $3.14, then climbed back to a pre-global financial crisis high of just over $11.
IT'S been a mighty tough road for AMP shareholders pretty much ever since the big funds manager listed on the stock exchange. The group was demutualised in 1998 and floated on the stock exchange for about $18.70 a share. In the early 2003 it tanked to hit $3.14, then climbed back to a pre-global financial crisis high of just over $11.
Like many financial stocks, it was clobbered by the GFC, falling back to a low of $3.52 in March 2009. It again made a recovery of sorts to get back to almost $6.50 last calendar year. But, like the rest of the market, it has performed badly in recent times.
AMP fell from an April high of $5.82 and hit $3.61 in September. Now Paul Ash, Victorian president of the Australian Technical Analysts Association, is asking whether it is time to buy. The fact that the recent low was slightly higher than that of 2009 is the first sign that the price fall may have been arrested, Ash says.
''A technical analyst now looks for a confirming buy signal,'' Ash says. ''This could be something as simple as an upward break of the confirmed down-trend line [the downward sloping blue resistance line].'' The down line has become ''confirmed'' as the price line has touched it three times. Only one is shown on the attached weekly graph as two of the occurrences were intraweek closes, Ash says.
The upward support line on the graph is yet to be confirmed, Ash says, as the price line has only touched it twice, again on intraweek closes. If AMP closes the week above the downward trend line, Ash says, a trader might then take a position. If it rises from there, all is well.
However, were the stock to close below the upward support line, that could serve as a sell signal as the assumption of an up trend would be proved wrong, he says. More conservative investors may like to wait until the price breaks through the red moving-average line, or the moving average itself turns up.
While AMP's share price has taken a battering, it is still a significant company, with almost $120 billion in funds under management in the Asia-Pacific region. It has a market capitalisation of nearly $12 billion, a price-earnings ratio under 12 times and a healthy dividend yield of 7.2 per cent, 60 per cent franked.
This column does not represent financial advice and those wanting to invest should seek independent counsel and do some homework.
rodmyr@ozemail.com.au
Frequently Asked Questions about this Article…
What has happened to AMP’s share price over the years?
AMP shares have seen big swings: the group was demutualised in 1998 and floated at about $18.70. In early 2003 the price fell to $3.14, later recovered to just over $11 before the global financial crisis (GFC), dropped to $3.52 in March 2009, recovered to almost $6.50 in the last calendar year, and more recently fell from an April high of $5.82 to $3.61 in September.
Are there signs AMP’s share price may be turning upwards?
Yes — technical analyst Paul Ash notes the recent low was slightly higher than the 2009 low, which could indicate the price fall has been arrested. He says a confirming buy signal, such as an upward break of the confirmed downward trend line, would strengthen the case for a turn upwards.
What technical buy signals should investors watch for in AMP shares?
Investors should watch for a weekly close above the confirmed down‑trend line (an upward break), confirmation of the upward support line, and for more conservative investors a break above the red moving‑average line or the moving average itself turning up.
What would count as a sell signal for AMP shares based on the article?
According to the article, if AMP were to close below the upward support line, that could serve as a sell signal because it would prove the assumption of an uptrend wrong.
What are AMP’s key fundamental metrics mentioned in the article?
The article states AMP has almost $120 billion in funds under management in the Asia‑Pacific region, a market capitalisation of nearly $12 billion, a price‑earnings ratio under 12, and a dividend yield of 7.2% (60% franked).
Is AMP still considered a significant company despite its battered share price?
Yes. Even though the share price has been weak, the article highlights AMP’s scale — almost $120 billion under management and a market capitalisation near $12 billion — making it a significant player in the Asia‑Pacific funds market.
Should I treat the article’s commentary as financial advice for buying AMP shares?
No. The column explicitly states it does not represent financial advice. The article recommends seeking independent counsel and doing your own homework before investing.
How might a conservative investor approach AMP shares according to the article?
A conservative investor might wait for more robust confirmation before buying — for example, a clear break above the red moving‑average line or for the moving average itself to turn up, rather than acting on an initial technical signal alone.
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