ALGO Buy Signal For QANTAS

Our ALGO engine triggered a buy signal on QAN into yesterday’s  ASX close at $6.16.

This “higher low” pattern is referenced to the intraday low of $5.95 posted on February 5th.

A recent broker note from CITI has retained their buy rating on the stock with a $7.90 price target.

Part of CITI’s analysis focused on the airline’s dynamic hedging program, which has reduced the drag on their overall profitability during the recent rise in fuel prices.

QAN was added to our ASX Top 50 Model portfolio in July of 2017 at $5.25.




ALGO Update: Keep OZL On The Radar

Since posting a high of $10.70 on June 12th, shares of OZL have dropped over 12% and reached a 2-month low of $9.35 in early trade today.

As illustrated in the chart below, the price of High Grade Copper has dropped a similar amount over the same period of time.

The negative slide in copper prices has overshadowed the positive news that OZL has acquired the remaining 10% interest in Avanco Resources in  Brazil.

We consider this acquisition a fundamental boost to miner’s extensive mine life and will add to their “lean business” model outlined at the Macquarie  Mining Forum earlier this week.

Our ALGO engine triggered a buy signal on OZL at $8.60 on February 12th and the stock has been in our ASX Top 50 model portfolio since June of 2015.

We will look to add to long positions around the $9.20 support level over the near-term.Oz Minerals

High Grade Copper



China & Asia Top 50

In the second half of 2018, value in oversold Asian markets will likely produce a good long-term entry level.

Our preferred ETFs are the IZZ China Large-Cap and the IAA, iShares Asia top 50.

Chinese indices are now down between 10 – 20% this year.

iShares Asia 50

iShares China Large Cap

IPL – Take Profits Or Sell Call Options

In mid-2017, our Algo Engine generated a buy signal in IPL and more recently we reaffirmed the entry into IPL when the stock looked to be finding support near $3.40 range. 

Since then, IPL has rallied 8% and is now closing in on our $3.70 price target. The short term momentum indicators are also now approaching an overbought range. 

IPL goes ex div 5 cents on the 23rd of November. Selling $3.70 September  call options will add an additional 11 cents of income per share.


BHP – 5% plus dividend yield

In FY18,  BHP will produce US$46 billion  in revenue and generate EBIT of US$16 billion, which will support a dividend yield of 5%+

If we look out into FY19 and assume moderate growth achieved through higher energy prices and disciplined cost control, it’s likely BHP will increase the dividend to US$1.40.  This will then place the stock on a forward yield of 5.4%.

BHP goes ex-div US$0.60 on the 7th of September. Adding a $34.01 (Euro) call option into October,  boosts the cash flow by a further $1.25 per share.


ALGO Sell Signal For Amcor

Our ALGO engine triggered a sell signal for AMC into the ASX close at $14.60.

The “lower high”pattern is referenced to the $14.76 high posted on February 8th.

Since trading as low as $13.10 on May 4th, the share price has risen close to 12%. At this point, we suggest clients either take profits on open positions or use a covered call strategy.

For those interested in the covered calls, we suggest selling the $14.75 calls into October for 35 cents.

This will allow investors to receive the 30 cent dividend on September 4th while increasing cash flow into the portfolio.


BOQ To Lift Key Lending Rates

BOQ has open the door for a full round of out-of-cycle rate hikes as the bank lifted its variable home loan rate and line of credit for both investors and owner-occupier loans.

Blaming rising funding costs, BOQ will raise both credit structures by 15 basis points effective July 2nd. 

With the RBA standing firm on rates until at least Q3 2019, we don’t expect BOQ to be the only  bank to snug rates higher on an out-of-cycle basis.

Our ALGO engine triggered a sell signal on BOQ on June 21st at $10.50. We maintain our negative outlook on the stock with a medium-term target near $9.40.

Bank of Queensland