Woodside – Higher Low

Woodside Petroleum is a current holding in our ASX 100 model portfolio.

Recent production guidance suggests 2019 will likely deliver relatively flat production growth.  WPL trades with an implied oil price of around US$55.

Upside in the share price still exists and we suggest adding a covered call option to enhance the income return.

A2 Milk – Valuation Review

The A2 Milk Company is under Algo Engine sell conditions and resistance is likely to build around the $13.50 level.

A quick look at the fundamentals puts into perspective the lofty expectations that are currently priced into the stock. 2018 EBIT was $280mn and no dividend was paid out. By 2020 the EBIT needs to double to $560mn to support the forecast 2.3% yield.

We’re skeptical of these consensus growth targets.

XJO – Sell Conditions

The S&P/ASX 200 is under Algo Engine sell conditions and the short-term technical indicators now also align. As a reference point, we suggest applying a 10 day moving average and monitoring the market closely, relative to it being above or below the average.

Below the average is a sign of continued weakness.