ALGO UPDATE: Take Profits In Woolworths

Shares of WOW were full of holiday cheer as they hit a 4-month high of $27.55 in early trade.

The internal momentum indicators have been in overbought territory for over a week, so we suggest shareholders look to take profits above $27.20.

Our ALGO engine signalled  a sell signal at $26.50 on November 2nd. We see the next key level of support for WOW at $26.60.


ALGO Update: Stay Short Commonwealth Bank

Our ALGO engine triggered a sell signal for CBA on November 13th at $81.55.

Since then, the share price has dipped to $78.00 but has lifted on year-end buying to $80.40.

The internal momentum indicators are pointing lower and we expect to see a break of the $78.00 level early in the new year.

Clients who are selling CBA short on the SAXO Go platform can place a stop in the $81.70 area, with an initial profit target near the November 3rd low at $77.20

Commonwealth Bank


ALGO UPDATE: JHX Is Still In The Sell Zone

Our ALGO engine originally triggered  a sell signal for JHX on November 22nd at $21.50.

The chart below shows that an additional sell signal was generated at Friday’s close at $22.40.

JHX  has been grinding higher, on lower volume, with support from unexpectedly strong housing data out of the USA.

Over the last week, the US new home sales, building permits and existing home sales have all printed higher than consensus forecasts.

From a technical perspective, JHX is still following a “lower high” pattern based on the May 2nd high trade at $23.20.

With a current P/E of  30.00, the stock is on the expensive side of its industry peers and due for a material correction lower.


James Hardie




After posting a low of $1238.00 on December 12th, Spot Gold has moved higher and reached $1270.00 in NY Trade last night.

The response of Newcrest shares has been relatively muted, but we expect a pick up over the near-term.

Our ALGO engine triggered a buy signal for NCM on December 15th at $21.75.

We still prefer the long side of NCM, along with the smaller producers SBM, SAR and EVN, and have an upside target near the November 29th high of $24.25.

Newcrest Mining



Softer US Yields Could Lift Local Names

The recent move higher in longer-dated US Treasuries has created a headwind for some of the yield sensitive names listed on the ASX.

Over the last 10 days, the US 10-year notes have risen from 2.28% to just under 2.50%.

This 10% move has also lifted the 2yr to 30yr spread from 85 basis points to a full 100 basis points.

The impact on local shares has been a 4.5% drop in TCL and a 3.3% fall in SYD.

Looking forward, it’s reasonable to expect the US yields to soften and the yield curve to flatten.

Given the current correlation to the local shares, we see the US flattening trade as potential positive for the local names such as TCL, SYD, WFD and GPT

US 2yr versus 30yr spread