Over recent weeks we’ve watched money flow into defensive yield names such as Sydney Airports, Transurban & GPT to name a few. Telstra has somewhat been left behind and we therefore may see buying support build from the current oversold levels.
We’ve focused on the short-term chart patterns in both TLS and TPM as a point of interest. Also, we’ve included a chart of the iShares Global Telco ETF to help capture the “bigger picture” trend within the large cap global Telco companies overall share price performance.
After a sharp rally on the back of equity weakness last week, Gold has consolidated above the $1240.00 level.
The technical picture is still constructive as the yellow metal is still above the 30-day moving average at $1234.00 and the RSI reading at just above 56.00.
There are still many global stock indexes trading at elevated prices. The market has proven that the inverse correlation of Gold moving higher, as stocks move lower, still intact.
We see scope for a test of the $1235.00 level before trading higher next week. Our medium-term target is the November 10th high of $1292.00.
Investors looking to profit on a move higher can look at either the Vectors Gold Miners ETF (GDX), buying the dip in Newcrest Mining down to $22.00, or placing Newcrest Call Option strategies.
Our Algo Engine flagged recent buy signals across most of the major US financial stocks and we’re now into the third day of buying support, since the buy signal was triggered.
We strongly advise tight stop-losses below the recent lows. The chart patterns are all relatively similar to the example below.
We’re watching for support building on the recent low in both the OOO BetaShares Crude Oil ETF and the broader based QRE BetaShares ASX200 Resources ETF.
The Algo Engine triggered a sell signal in Transurban (TCL) yesterday at $11.72.
The stock has rallied over $1.00 since last week’s announcement that tolls to pay for an upgrade of the Inner City By-Pass in Brisbane.
From a broader perspective, TCL has traded between the $12.65 high made in August, and the low of of $9.45 posted in early November.
The $11.72 level is a bit higher than the 50% retracment of of this range, but we see stiff chart resistance at $12.00. We see the first level of support in the $10.80 area.
We own TCL in client portfolios from lower levels and we’ve been bullish in recent weeks on TCL and utilities, in general. This view has been predicated on the faltering backdrop for the the global relation trade.
The rally in TCL will soon stall at near $12.00 and investors should sell call options into September, with a view towards maintaining exposure to the upcoming $0.25 dividend in June.
The XJO continues to push the upper range of the recent consolidation band. If the resource names can hold their current higher low formation, we may see further short-term strength in the index.