Telstra Instalment Receipts

Since 24 January Telstra shares, both ordinary and instalment receipts, have declined, by 8.4% and 14% respectively. Actually there's no great mystery if one consults the charts. Since investors large and small, particularly those oriented towards technical analysis, follow Telstra fairly closely, the ordinary shares have enjoyed unusually defined levels of resistance and support. Consequently, there have been two other share price downturns not unlike the present. February to May 1999 saw a 19.5% decline in Telstra's fully paid shares and July to October 1999 saw 17.6% lopped from the price. Now November 1999 to February 2000 has seen a 21% fall. In each case, the resistance level seems to have been around $9.15 and the support level at $7.40. With Telstra shares below their long term support level it seems that history is about to repeat itself. We maintain the recommendation from our recent Ringing a Profit in 2000 special report of BUYING the Instalment Receipts and HOLDING the ordinary shares.