Our Algo Engine is now flagging the “lower high” technical structure in Bendigo Bank.
The stock has seen a short squeeze following the recent earnings result and is now likely to find renewed selling pressure at $12.40.
Investors should remain on the short side of this trade with a stop loss on a break back-up through the $12.50 range.
We also have a short signal in Bank of Queensland.
A reminder that both HVN and JBH have current Algo Engine short signals.
Selling pressure remains steady in these names and we prefer the short side from current levels.
We’ve been warning about a number of ASX large cap stocks which trade on 25X earnings and 2% yield and, at best, will deliver low single digit earnings growth.
Two examples are the recent sell signal posts we’ve made on Computershare and James Hardie.
We feel that the day of reckoning is approaching and, in many instances, as seen in CPU & JHX, the selling has already started and we’re now seeing a retracement back to the mean, (and likely beyond).
We’ll leave the 150x PE of Amazon, or the 200x PE of Netflix for a future posting, but suffice to say; reality will soon hit.
We continue to track GNC following the recent Algo Engine buy signal.
GNC has proven tricky in identifying the price reversal, however, we feel it is approaching an oversold level and ready for a bounce higher.
$8.50 is support and investors could build long exposure now with tight stops. a break below $8.50 may set-up a new buying range in or around $8.30.
Keep this one on your watch list.
The chart below shows the recent Algo Engine short signals in DMP. We look for the price action to test lower levels in the near-term as the lower high structure remains the predominate technical pattern.
Stay on watch as the last and final leg lower in the selling occurs. Investors can expect a sharp rally higher from oversold conditions, once we see DMP trade below $38.
Although we don’t have a current Algo Engine short signal in AZJ, we remain cautious of the 100% payout ratio the company continues to maintain.
Investors should look at the short side with a stop loss above the $5.23 high.
Our Algo Engine triggered a buy signal in Wynn Resorts, (NASDAQ listed), at $125.
We see the signal level as support and investors should apply a stop loss on a break back below this price point .
GPT reported 1H17 earnings showing greater than 3.5% growth on the same time last year.
With yields in the US moving lower, we expect moderate support for the REIT sector, although investors should remain cautious of the stretched valuations.
Based on FY18 DPS of $0.25, we have GPT on a forward yield of 5%.
Our Algo Engine triggered a buy signal on Invocare at $13.60 and the stock is now trading $14.18.
We feel IVC could trade $14.50 before running into selling pressure.
FY17 results for ANN were mixed with revenue growth of 2- 3 %. Cash conversion was strong and lower capex supported the dividend.
With this report, it’s difficult to draw any clear comparisons to past results as added expenses and divestment of businesses segments renders historical divisional comparison meaningless.
We view FY18 guidance as conservative and see the 3% forward yield as an attractive risk reward proposition.
A streamlined operation and moderating raw material costs should see Ansell’s share price trade higher over the next 12 -24 months.
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