Our Algo Engine triggered a buy signal on the 23rd of August in AGL at $22.64.
Following this, AGL rallied to $26.50 before retracing back to the current higher low at $23.70.
AGL remains in our ASX50 model portfolio and a positive earnings result when the company updates the market on the 8th of February, should provide renewed buying support.
AGL pays a $0.41 dividend on the 23rd of February.
Our ALGO engine triggered a buy signal in Bega Cheese at yesterday’s close at $6.80.
This signal is based on the “higher low” chart formation relative to the $6.55 low on October 5th.
BGA, who bought Vegemite a year ago, has continued its expansion plans buy acquiring the Peanut Company of Australia in December.
According to BGA management, the company’s strong balance sheet will allow it to look for other potential opportunities in the dairy and food sectors this year.
Shares of BGA gained more than 60% in 2016/17.
As many consumers steer away from diets with high sugars and carbohydrates, we believe BGA is a reasonable investment at current levels.
Initial technical price resistance will be found in the $7.50 area.
Bega Cheese
Shares of Rio Tinto are down almost 1% in early trade near $81.00.
This could be a case of “buy the rumor, sell the fact” as the mining giant’s Q4 production numbers were largely as the market expected.
Earlier today, RIO announced a 3% increase in Pilburra iron ore output , producing just under 88 tons, and reaching its 2017 guidance figures of 330 tons for the year.
Since posting a low of $68.60 on December 12th, RIO shares have rallied over $13.00 in just over a month.
This is a 20% gain on what has been a surprisingly resilient Spot iron Ore market over the last 8 weeks.
RIO has been in our Top 50 Model portfolio since March 6th when it was trading at $61.50.
We will look for a pull back into the $73.00 area before adding to long positions.
Rio Tinto
Since posting an intra-day high of $7.60 on November 29th, shares of SYD have slid over 12% lower and hit a 10-month low of $6.63 yesterday.
A combination of higher interest rates and questions about the company’s new leadership have kept buyers on the sidelines over the last month.
However, SYD’s new chief executive Geoff Culbert has signalled that he will focus on boosting tourism in NSW when he officially takes over at the end of the month.
From a technical perspective, yesterday’s low print in the share price sets up a potential “triple bottom” pattern dating back to April of last year.
The daily price chart illustrates that when shares of SYD traded in the low $6.60 handle in April and August of last year, those level preceded a 10 to 15% rally in share price in the following months.
SYD is scheduled to release their full-year traffic numbers in two weeks and we believe investors will benefit from holding shares from these levels in their portfolios.
Sydney Airport
Shares of QAN have jumped at the ASX open and have reached a 4-week high of $5.20 in early trade.
Considering the headwind from the recent rally in crude oil prices, the stock has posted an impressive bounce off the January 10th low of $4.77.
The internal momentum indicators are pointing higher and our ALGO engine triggered a buy signal on December 8th at $5.25.
We expect to see additional gains into the March 7th dividend payment, with the next level of chart resistance near $5.60.
QANTAS
Our ALGO engine triggered a buy signal for Stockland Corporation at $4.28.
Like several of the ASX interest-rate sensitive names, the SGP share price has dropped more 10% over the last month.
With over $16 billion in real estate assets across the country, SGP is Australia’s largest residential property developer.
We believe that the company’s diversified community development model will insulate the firm from a downturn in the higher-end property market and support a higher share price.
The technical “higher low” pattern is based on the July lows near $4.00. With a year-on-year dividend expected in the 26 cent range, this puts the stock yield at around 5.5% at current prices.
Stockland
Treasury Wine Estates has been included in our Top 50 Model Portfolio since September 2014, when the shares were priced at $4.90.
The ALGO engine has triggered several buy signals since then and we have bought and sold this stock successfully for customer accounts over the last 3 years.
We noticed that ALGO buy signals have occurred on a “higher low” pattern and after an approximate 10% pull back in the share price.
Our ALGO engine triggered a buy signal at the ASX close yesterday at $14.80.
Prior to yesterday’s signal, the most recent buy signal was on July 12th at $12.30. This signal was on a “lower high” pattern and about 10% below the June 16th high of $13.75
Similarly, yesterday’s buy signal at $14.80 pencils out to a 10% correction from the December 20th high at $16.55.
Fundamentally, we believe that TWE has a very solid growth and distribution model and new highs above $16.55 will be reached over the medium term.
Treasury Wine Estates
We recommend investors add Brambles to their portfolio as an income play.
Buy the stock and sell $10.50 June call for $0.38 credit and keep exposure to the $0.145 dividend on the 8th March.
Brambles
We recommend investors buy Amcor at $14.90.
Since December 1st, the price of WTI Crude Oil has rallied over 14%.
Just in the last 5 days the WTI price has risen 5% from $60.25 to a 3.5 year high today of $63.50.
Recent reductions in crude inventories combined with Geo-political tensions in the Middle-East have support prices.
However, there have been many analyst sceptical that this will be a protracted rally in Crude prices.
This scepticism can be seen in the price action of some of the local oil-based names.
Despite the 5% rise in WTI over the last week, shares of OSH have dropped by 2.5% to $7.90, and the share price of WPL and STO have been consolidating off their recent highs and look to be pointing lower.
We urge caution on the sustainability of the recent run up in Crude prices and would suggest exiting long exposure to WPL, STO and OSH
Woodside
Santos
Oil Search
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Investor Signals Pty Ltd
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