Sorry, but this content is restricted to our members.
Please login with your account or register for a free trial. If your trial has expired, then you may renew it here.
If you are having an issue with your account, then please get in touch with us.
It was announced today that BOQ and SUN will be forced to send executives to face questioning from the royal commission when hearings resume later this month.
According to Kenneth Hayne, the line of questioning will focus on lending practices to small businesses over the last 10 years, many of which were tipped into default.
Our ALGO engine triggered a sell signal in SUN on November 9th at $14.20. Since then the stock has traded as low as $12.60 and is now back in the sell-zone near $14.20.
BOQ shares pushed against resistance at the $10.50 level last week and we have a medium-term downside target of $9.60.
BOQ
Suncorp
Lend Lease has filled the price gap to $18.50 and appears to have found price resistance.
Our initial downside target is the April 9th low of $17.05.
Lend lease
Last week on the blog we looked at the short signal on Orica leading into their earnings result.
1H18 earnings were announced yesterday and they disappointed, with a 37% drop on the same time last year.
NPAT of $124m where as consensus was looking for $149m.
The share price dropped over 5% and reached an intra-day low of $18.70 before recovering to $19.00.
This was a very popular “short” CFD trade on our SAXO Go trading platform; we suggest taking profits on the short ORI position near the $19.00 area.
Orica
Shares of WBC are trading over 2% higher and have reached a 7-week high of $29.70 in early trade.
WBC announced today that their net profit and cash earnings were 7% and 6% higher than the corresponding six-month period.
However, even though the cash earnings equals $1.25 per share, the bank said that they would hold its dividend at 94 cents per share, fully franked.
We see the next key resistance level at $30.40 and medium-term support near the April 27th low of $27.60.
Westpac Bank
One of the main policy points from Wednesday’s FOMC meeting was that the US Central bank will accept an overshoot in inflation even if overall GDP growth starts to slow……..more commonly known as Stagflation.
Stagflation is an economic condition which is characterized by higher inflation and lower GDP and employment growth, which is not bullish for equity markets and not bearish for Gold.
Over the last 6-months, Gold has been trading in a broad pennant formation bound by $1365 on the topside and supported at $1300 at the lower end of the range.
Due to recent USD strength, the yellow metal is currently trading near the bottom end of the range near $1315.
If US inflation rates continue to probe higher, we expect the USD/Gold correlation to soften. In an inflationary environment, Gold and the USD usually move higher simultaneously.
As illustrated in the charts below, the local gold mining stocks have been showing divergence with SBM, EVN and SAR near all-time highs, while NCM is trading at $21.55, almost $3.00 below its 52-week high.
Our base case is that Gold will rise over the medium-term, which should be supportive for the local mining names.
For more information on investment strategies within the Gold sector, call our office at 1-300-614-002.
Santa Barbara Mines
Saracens Mineral
Evolution
Newcrest Mining
The S&P/ASX 200 Index finished the week to Friday up 1.8%.
The best performer was the Information Technology sector, up 4.1% and the worst performer was the Energy sector, up 0.4%.
Resistance for the XJO is 6150.
Sorry, but this content is restricted to our members.
Please login with your account or register for a free trial. If your trial has expired, then you may renew it here.
If you are having an issue with your account, then please get in touch with us.
Shares of TAH have had their strongest week in 3 months despite mixed news about increased competition and lower overall wagering forecasts.
The share price posted a high of $4.52 yesterday but has slipped back to initial support near $4.35 in early trade today.
We still prefer the long side of TAH and are expecting run back over the $5.20 area over the medium-term.
Based on the current price, TAH is yielding 4.6% on this year’s dividends.
Tabcorp
The NAB result was subdued with revenue growth deteriorating. 1H18 NPAT $2.75bn down 17%, EPS 99cps and Div 99cps.
“looks like a dividend cut is imminent”
1H18 revenue rose just 0.7%, whilst Net Interest Income fell and loan growth was anemic at +1%.
In both the ANZ and NAB results, we’ve seen early signs of bad and doubtful debts, (for 90 days+), beginning to rise from very low historical levels.
Lower loan growth, no revenue growth, increased costs associated with restructuring, competition from technology disruptions, increasing bad debts, wafer-thin bad loan provisioning are reasons to “sell the rally” in the banking shares.
6100 – 6200 on the XJO Index should be a level to review bank holdings.
NAB
Level 29 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453
Or start a free thirty day trial for our full service, which includes our ASX Research.