Chart Update – XJO
The XJO has formed a minor lower high and lower low formation. 5836 now acts as resistance.
Computershare – Overvalued
At 20x forward earnings and 2.5% dividend yield, we feel Computershare is overvalued.
The market is too bullish on the cost out story and anticipated earnings growth. The August earnings result will likely be a reality check.
Amcor – Core Holding
Amcor has remained one of our preferred portfolio holdings. We see 8% EPS growth over the next 12 months and the stock trades on a forward yield of 3.8%.
The current price is beginning to approach full value and we recommend selling the $17 call options into December to enhance the return.
QBE & IAG
We’ve been buying QBE and IAG over the past few weeks. further upside is likely to be limited from the current level and therefore, taking profit or selling covered call options is advised.
Chart Update – XJO
The XJO has now created a “lower low and a lower high” formation. We remain cautious on the index unless the price action can trade back above 5850.
Time to Take Profits – Resmed
We’ve recently been buying RMD, AMC, ANN, CIM, RHC and TWE.
In particular, RHC is worth holding with a reasonable upside target to $75.00.
The other names mentioned are now at a price point where either taking profit or selling tight covered call options is recommended.
Algo Buy Signal – Woodside Petroleum
The sell-off in oil back to US$45 per barrel has seen WPL, OSH, STO, and ORG all come under selling pressure.
Origin remains one of our preferred exposures among the energy names and after taking profit recently at $8.00, we’ve been buyers again on last weeks pullback to $7.30.
We now add WPL to our buy-list; we believe it’s back within a price range where buying interest is likely to start picking up.
The Algo Engine triggered a buy signal on Friday in WPL, at or near $30.00
Algo Buy Signal – Seek
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.
ETF Watch – Australian Banks
We’ve built minor long exposure in MVB following the recent Algo Engine buy signal at $26.90.
Ansell – Buy Now
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.
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