Transurban – oversold & buying support building
Our Algo Engine triggered a recent buy signal in Transurban, and with the stock now trading $11.10, we consider it a buying opportunity.
TCL goes ex div $0.265 on the 29th June.
Transurban
Crown – Back at support level
Our Algo Engine recently triggered a buy signal in Crown Resorts and with the stock now back on support, we recommend investors buy CWN near the $12.50 level.
Crown Resorts
Dow Jones falls 11.6% – Where is support?
The Dow Jones Index dropped 724 points on Thursday and another 425 points in the overnight session to close at 23,533.
The benchmark index has now declined more than 3,000 points, or 11.6% from its high on Jan 26th, at 26,616.
We’ve been warning about the stretched PE valuations in US markets and we forecast further selling in the tech-heavy NASDAQ, which will drag markets lower.
The Dow closed at 19,827 on Inauguration Day, 20th Jan, 2017, which means it has about 3,700 points further to go before the Trump rally gains disappear.
22,000, or a 50% retracement of the breakout rally which began in late 2016, provides a reasonable downside target where buying interest is likely to provide support for the index.
The NASDAQ is 10% above the 50% retracement price target.
XJO finishes the week down 2.2%
The S&P/ASX 200 Index finished the week to Friday down 2.2%.
The best performer was the Energy sector, up 1.9%, and the worst performer was the Telecoms sector, down 3.7%.
Our forecast for market weakness continues and we again highlighted the cascading lower high pattern in the XJO.
XJO Index
Algo Update – Goodman Group (Sell = 22% Return)
The Algo Engine triggered a sell signal in Goodman Group earlier this week. The signal resulted in GMG being removed from ASX 50 model portfolio. The position was held for 550 days with a return of 22.2%, plus an additional $0.39 in dividends.
Goodman Group has been a very strong performer within the REIT sector, with underlying EPS consistently at high single digits. The sell signal can be viewed as a cautious reminder of the compressed 3.4% yield GMG now trades on.
Goodman Group
TPG Reported 1H18 Earnings
TPG reported 1H18 EBITDA up 0.1% to $418 million. The 1H result was ahead of expectations and TPG upgraded their full year earnings guidance on the back of ongoing cost reductions.
We continue to view TPG as expensive and with significant execution risk around upcoming capital expenditure, we prefer the short-side of this trade.
FY18 EPS $0.42 and DPS $0.04, places the stock on a forward yield of less than 1%.
TPM
Tabcorp – In 2020
We look at what the financials are likely to be in 2020; post the Tatts Group integration and cost savings.
FY20 revenue $5.5 billion, EBIT $880m, (FY17 was $325m) with underlying earnings growth of 6 – 8% per year and a forward dividend yield into 2020 of 5.5%.
Investors will be well served by tracking TAH for an upcoming entry point as the stock price re-bases near current levels.
TabCorp
XJO Remains below 5821
The lower high pattern in the XJO continues to cascade down with 5821 acting as resistance.
XJO
XJO – Resistance Levels
The XJO chart displays the recent pattern of negative price reversals.
The latest reversal in today’s trading session, created a “lower high” at 5982.
Technical traders will be leaning on the short-side of the market, until the index trades back through the 5982 resistance.
XJO Index
Buy GPT & WFD At Current Levels
We recommend buying GPT & WFD and placing a stop-loss orders below the recent support levels, indicated on the relevant charts below.
Investors may prefer to hold the position and sell call options to enhance the income, whilst staying exposed to the next round of dividends.
GPT will pay $0.123 dividend on 29th June.
WFD will pay $0.16 dividend on 11th August.
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453