S&P Biotech ETF

ETFS S&P Biotech is now under Algo Engine buy conditions.

CURE ETF offers investors exposure to US biotechnology companies. These are companies engaged in research, development, manufacturing and/or marketing of products based on genetic analysis and genetic engineering. Examples include the development of immunotherapy treatments and vaccines to treat human diseases.

CURE aims to provide investors with a return that, (before fees and expenses), tracks the performance of the S&P Biotechnology Select Industry Index. CURE uses a full-replication strategy to track the index, meaning that it holds all of the shares that make up the index. It is equal-weighted, meaning each holding makes up the same portion of the portfolio and therefore, contributes equally to the overall performance.

Seek – Sell Signal

Seek is under Algo Engine sell conditions and we remain on the short-side of the trade.

Two negatives we focus on;

1}Surprise need to raise money in the bond market; and

2} Announcing they were dumping the final dividend in a bid to preserve capital, blaming the “uncertain environment” for the decision.

CSL – Buy

CSL is under Algo Engine buy conditions and remains one of the best-performing stocks in our ASX model portfolios.

The technical indicators show the recent higher low formation with support at $270.

CBA – Reports 12 Aug

Commonwealth Bank of remains under Algo Engine sell conditions and we see resistance building near the $74 price level.

CBA reports FY20 earnings on 12 August, at which time the market will focus on CBA’s dividend and any capital management commentary. Consensus expectations are for earnings to be $7.8bn, (down 10% on 2019 numbers), and the 2H20 dividend to be cut by 50%.

We remain on the short side of the CBA trade.

US Earnings

Q2 earnings for the S&P 500 are expected to decline by 44%, the worst drop since the fourth quarter of 2008, when profits fell 67%.

This week we’re watching the following results.

Monday AIG

Tuesday Disney, AllState and Fox

Wednesday Metlife

Thursday Bristol-Myers.

Friday

NASDAQ remains above the 10-day average.

TPG – Buy

TPG Telecom has traded down to $7.50 following a research report published by a leading investment bank this week, which highlighted a series of risks facing the business.

Despite the report, we see value in TPG and expect the stock to trade higher from the current level.

Since making the above post on 23 July, TPG has rallied to $8.20 and closed near $8.00 on Friday. We continue to see value in TPG and suggest investors watch for another entry opportunity below $8.00.