Our Algo Engine triggered a buy signal recently in Seek at $16.30. We’ve been holding back on buying this name but now it’s entering the centre of our radar.
After looking at the price action, we’re inclined to believe it’s now approaching a support range where buying interest is likely to pickup.
We’ve built minor long exposure in MVB following the recent Algo Engine buy signal at $26.90.
Our Algo Engine triggered a buy signal in Ansell on the 7th February at $21.50 and the stock is now trading $23.22.
The recent selling weakness, where price has retraced from $25 back to $23, provides another buy side entry opportunity. The company will commence a $400m share buyback program later this month which should help to underpin the share price.
Stop-loss orders should be applied on a break back below $22.50. Buy and hold investors seeking added yield, may prefer to take a slightly longer-term view and sell-out-of-the-money calls at $25 into November.
Our Algo Engine triggered a buy signal in BSL on the 19th April at $11.00, the stock is now trading $12.38. Stop-loss orders should be applied on a break back below $11.00.
Our Algo Engine flagged a buy signal in IPL on 23rd May. The price action looks to be developing support at or near $3.50 and the fundamental earnings picture is likely to improve in FY18 & FY19.
The XJO has made a minor lower low after trading 5629 in Thursday’s session.
We may see some buying support in the banks and BHP which will help support the index, although resistance or selling pressure will pick-up in the 5700 – 5790 range.
Mid next week in the US the FOMC will announce their decision on US interest rates. The market is expecting a 25 basis point increase.
Buying interest in the US banking stocks has increased over the last few trading sessions, as increasing rates are perceived to help bank profit margins. CitiGroup hit a new post GFC high, whereas, Goldman Sachs and JP Morgan have only seen moderate bounces from their recent lows.
CBA will need to hold the $77.65 low.
Our Algo Engine flagged a buy signal in BHP on the 3rd of May at $22.50. The stock is now trading at $23.50 and has developed a reasonable support structure, as displayed in the chart below.
We stay exposed to BHP on the long side and look for further upside. Apply stop-loss below $22.50.
We continue to see Amcor as a solid contributor to portfolio returns, especially when complimented with a slightly out-of-the-money call option into November or December.
A combination of the dividend and call option premium produces 10 – 12% annualised cash-flow.
FY18 forecast revenue US$9.6b, EBITDA US$1.5b, Net Profit US$790m, EPS US$0.66 and DPS US$0.49 places the stock on a forward yield of 4%.
Buy on any marginal price retracement.
On the 30th of May we looked at the MVB Veneck Vectors Banking ETF and identified the 50% retracement target to be $26.00. Yesterday, the MVB traded at a low of $26.56.
The 50% retracement of the prior peak -to-trough does not guarantee price support. However, more often than not, buyers will step back in at or near this point.
The conundrum facing local ASX investors is the dislocation between US equities and Australian equities. As such, “buy on the dip” domestic investors will need to remain cautious of the extended US equity valuations.
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453