S&P/ASX 200 finished the week up 0.12%.
The S&P/ASX 200 Index finished the week to Friday up 0.12%.
The best performer was the Utilities sector, up 4.5% and the worst performer was the Materials sector, down 1.2%.
Origin Energy – Hits Profit Target
Our Algo Engine has triggered a number of buy signals in ORG, as the two year downtrend reversed and a new uptrend of “higher lows” commenced in early 2016.
The recent buy signal at $6.75 means the stock is still in our ASX 50 Model Portfolio, however, shorter-term investors may wish to consider taking profit, as the stock now looks fully valued.
Algo Buy Signal – ANZ, NAB & WBC
Following the recent sell-off in the major banks, we’re now seeing the Algo Engine flag the short-term “higher low” formation.
We’re cautious about entering these positions on the long-side due to the regulatory risks the banks face & the limited top-line revenue growth outlook for the sector. However, the search for yield may support another push higher in prices.
ANZ, NAB & WBC are buy signals, (place stop loss below signal low), CBA & SUN are showing sell signals.
Algo Buy Signal – WPL
We recommend buying WPL as a new “higher low” formation builds at $31.50.
The last Algo Engine buy signal was triggered back in June, with WPL bottoming-out in September at $28. The recent retracement and higher low at $30.60 now looks to be a solid base.
Buy The Dip In Gold
Over the last two weeks, the price of Gold has made two attempts at breaking through the $1300.00 mark.
On both occasions, the yellow metal dropped back to find support just above the $1270.00 level.
This technical pattern is known as a “pennant” formation and is a continuation pattern. In this case, the break out points for range extension are $1308 and $1263.
Fundamentally, the case for buying Gold remains compelling. The surge in volatility across global stock markets combined with heightened geopolitical uncertainty supports the logic for owning Gold or Gold mining shares.
We expect the price of Gold to break through the $1300 level over the near-term. Our preferred Gold mining shares are NCM, EVN, SBM and SAR.
Investors looking to profit from a rally in Gold can either buy these shares outright, or buy their CFDs listed on our SAXO Go platform.
Spot Gold
Newcrest Mining
Santa Barbara Mining
Evolution Mining
Aristocrat – FY17 Earnings
ALL delivered $543m, (37% increase), in underlying profit for FY17.
A good result was offset by a negative response to their announced acquisition of Big Fish Games. The acquisition of Big Fish is the second deal this year where Aristocrat is expanding into social gaming.
FY18 is forecast to deliver a further 20% growth with net profit of $650m, EPS $1.05, DPS $0.42 placing the stock on a forward yield of 1.9%.
We hold ALL in our ASX 50 model portfolio, following the Algo Engine buy signal triggered in July at $20.25.
China Factory Activity
China factory activity expanded at a quicker pace in November, with the official manufacturing PMI coming in at 51.8, while the services PMI accelerated to 54.8.
Chinese GDP grow close to 7% in the 9 months to September.
iShares China Large Cap ETF has rallied from $40 to $62 in the last 12 months, we now look for the next Algo Engine buy signal.
Bank Shares Roiled On Royal Commission Announcement
Shares of the “big-4” banks are trading sharply lower as the Government announced a $75 million Banking Royal Commission before the ASX open today.
When making the announcement, PM Turnbull said it was a regrettable but necessary action.
The terms of the inquiry are wider than the market expected and will include the entire financial services sector. The final report will be due in February 2019.
We have been giving the banks a wide berth recently due to likely headwinds from slower loan growth and falling profit guidance. We’ll continue to watch the ALGO engine for trade updates and future levels to enter the market.
MVB Aussie Banking ETF
Algo Short Signals – CBA, SUN & QBE
QBE, SUN and CBA are recent examples of the “lower high” formation being identified by the Algo Engine.
SEEK – Valuation Review
SEEK provided a trading update at its AGM yesterday, upping its guidance for
EBITDA growth to 13% and reaffirming NPAT guidance of $220-230m.
FY18 Revenue $1.3b, EBIT $340m, EPS $0.63, DPS $0.44, placing the stock on a forward yield of 2.4%.
Our Algo Engine last triggered a buy signal back in June, when SEEK was trading at $16.40. A pullback to $17 will provide a lower risk entry level.
SEEK
Level 17 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453