Algo Short Signal – Harvey Norman

Posted on | by Leon Hinde | Leave a Comment on Algo Short Signal – Harvey Norman

The technical pattern for Harvey Norman started to break-down early this year when the price action traded through the $4.50 support level.

Since then, HVN made a low in June at $3.55 and has now had a counter-trend rally back to $4.50.

Our Algo Engine is now flagging the “lower high” structure and we’ve added HVN to the short trade list with a stop loss above the $4.75 area.

Short term traders may prefer to use the momentum indicators to compliment the entry and stop loss rule.

HVN reports on the the 31st August. The market is looking for NPAT to increase to $377m, (from $337m last year), and DPS up 1 cent to $0.18.

Overly optimistic property revaluations, along with weak consumer trends, concern us and support our bearish view.

Chart – HVN

 

Crown Resorts & TabCorp

Posted on | by Leon Hinde | Leave a Comment on Crown Resorts & TabCorp

Crown Resorts reported their FY17 earnings on Friday, and the result showed a 13% decline in revenue and 11% fall in EBITDA. Helping to offset this was a further $375m share buyback.

Based on $0.60 of DPS in FY18, Crown trades on a forward yield of 4.8%.

Chart – CWN

TabCorp Holdings reported FY17 earnings on Friday with underlying net profit of $179m, down 4% on the same time last year.  We see encouraging trends within the core wagering business with digital turnover up 14% and fixed odds revenue growth of 15%.

We expect the Tatts merger  to be completed by the end of the year and with the FY18 dividend yield at 6%, we see upside potential to $4.50 – $5.00.

Chart – TAH

 

 

 

Algo Signal Update – GrainCorp

Posted on | by Leon Hinde | Leave a Comment on Algo Signal Update – GrainCorp

Our Algo Engine has been alerting us to the retracement and “higher low” pattern developing in GrainCorp.

The stock price bounced from oversold conditions in Thursday’s trading, after touching $8.51. Friday displayed strong follow through buying with the price action closing near session highs.

We’ve been looking for a move higher in GNC, it looks like it could be underway, and a rally back to $9.25 – $9.50 is our target.

Apply a stop loss below $8.51.

Chart – GNC

Invocare is another name we’re watching for confirmation on a developing “higher low” pattern. Friday’s closing price was a little weak. We’ll watch this name into next week and keep you updated on our analysis.

 

Chart – IVC

 

 

Suncorp – FY17 Earnings Fall Short of Expectations

Posted on | by Leon Hinde | Leave a Comment on Suncorp – FY17 Earnings Fall Short of Expectations

Suncorp announced earnings for FY17 which resulted in a sharp drop in the share price during yesterday’s session.

The group delivered NPAT of $1,075m up 3.6% on the same time last year. Suncorp also announced a final dividend of $0.40  taking the full year dividend to $0.73.

We’ve been warning about Suncorp in the monthly ASX 50 video reports and exited all Suncorp holdings 8 weeks back at $14.50 per share.  We remain cautious, as downside risks are increasing from higher costs and increased risk of higher BDD charges in the bank.

The previous point is not a unique issue to Suncorp, the pattern of higher expenses and under preforming loans will soon become more evident for all the banking names.

Chart – Suncorp