US Mega-Cap Technology Earnings
US mega-cap technology stocks will soon provide March quarter earnings updates. With the following 4 names representing 44% of the index, investors should be watching the numbers.
Woolworths – Buy-Write 8% Cash Flow
Woolworths Group is a suitable buy-write opportunity where investors are looking to generate income.
WOW goes ex-div $0.57 on the 3rd of September.
For more detail on the options strategy, please call our office on 1300 614 002.
BHP & RIO – Iron Ore Prices Reviewed
The following graph displays the long term trend in Iron Ore prices and below that is the 1-year price history.
Iron Ore prices have held up surprisingly well during the early stages of the market sell-off. We do have some concerns that resistance remains in the high USD$80 per tonne range and the pressure is now to the downside.
This forecast feeds through to our forecast for BHP & RIO, where we feel investors are best served by waiting for entry levels at lower prices.
9-year history
1-year history
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NAB – Profit Hit
We expect National Australia Bank to run into selling pressure at $16.50. We favour the short side of this trade.
Today NAB announced first-half earnings will take a $1.14 billion after-tax hit – even before the impact of the coronavirus is accounted for.
NAB said investors will have to wait until it reports its half-year numbers on May 7 to see the impact of the pandemic on its “earnings and balance sheet including provisions, combined with capital and dividend implications”.
Oil – Buy the Dip
Betashares Crude Oil Index ETF-Currency Hedged
We expect the current pullback will create a “buy on the dip” opportunity. Our preferred names are ORG, STO and the OOO oil ETF.
BBOZ – A Market Hedge
Betashares Australian Equities is the Australian Equities Strong Bear Hedge Fund. The inverse ETF provides an approach to profit from, or protect against, a declining Australian sharemarket.
The ETF is designed to generate magnified positive returns when the market goes down (and vice versa) if the market was to rise.
As a technical reference point, we’re increasing our market hedging whilst the XJO index remains below the 5533 level.
The inverse BBOZ ETF will likely find support should the XJO continue to struggle below the 5533 resistance.
Invocare – institutional placement
InvoCare announced it will raise up to $250m in equity at $10.40 through an underwritten institutional placement plus up to $50m through a SPP.
The funds will be used to pay down debt and shore up the balance sheet.
Xero – Buy the Dip
We add Xero to our watch list and look for support to develop within the $62 – $68 price range.
Accumulate for long term growth.
Brambles – Overhead Resistance
Look for the short-term momentum indicators to roll over and selling resistance to build within the range indicated below.
Since the above post, BXB ran into selling pressure at $12.25. At $10.50 BXB is back in a range where buying is likely to rebuild.
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