ALGO Update: Stay Short CBA

Posted on | by Todd | Leave a Comment on ALGO Update: Stay Short CBA

Shares of CBA have traded back over $75.00 in early trade on the back of solid gains in the US banking sector on Wall Street.

However, we see this as a brief corrective move within the broader 8% decline over the last month.

A report from Credit Suisse this morning suggests that the CBA could face a $200 million increase in its annual operating costs over the next two years because of legal fees and related costs to defend the AUSTRAC money laundering accusations.

Our ALGO engine triggered a sell signal in CBA on July 4th at $84.00. We see solid technical resistance in the $75.60 area and more range extension to the $70.00 handle over the medium term.

Commonwealth Bank

 

Tabcorp – Oversold

Posted on | by Leon Hinde | Leave a Comment on Tabcorp – Oversold

Tabcorp is likely to trade higher, into the $4.50 range following independent expert Grant Samuel indicating the proposed $11 billion merger of gaming giants Tatts Group will deliver fair value for Tatts shareholders.

Tabcorp says the merger is expected to deliver at least $130 million in annual earnings from what it calls synergies and business improvements, tech integration, corporate cost savings and other consolidations.

It will take about two years to fully integrate the old Tabcorp and Tatts businesses,  according to Tabcorp.

 Tabcorp

 

Algo Update – Macquarie Bank

Posted on | by Leon Hinde | Leave a Comment on Algo Update – Macquarie Bank

Our Algo Engine triggered a buy signal in MQG near the recent low of $82.28.

During an outlook update provided to the market, MQG re-affirmed guidance for its FY18 result to be broadly in line with FY17.  Management noted that, strong revenues in the FUM business will help underpin FY18 earnings.

FY18 cash earnings of $2.3b, EPS $6.70 and DPS $4.70, represents 3 – 5% earnings growth on FY17 and places the stock on a forward yield of 5.4%.

There appears to be short-term upside price momentum from the recent signal, however, stop losses below the $82.28 low are advised.

Chart Watch – IAG & SUN

Posted on | by Leon Hinde | Leave a Comment on Chart Watch – IAG & SUN

The Insurance sector in the US rebounded in Friday’s session, following oversold levels which were caused by concerns about weather related claims.  

We’re expecting the local insurance companies to find buying support near the current price levels. This will likely be a short-term trade higher, as we anticipate the sector will then make a “lower high” formation.

Our two preferred names are IAG and SUN.

STO Trade Update

Posted on | by Todd | Leave a Comment on STO Trade Update

With the recent hurricane activity near refinery locations in the USA, the price of Crude Oil has been volatile and difficult to forecast accurately.

This has kept our ALGO sell signal for STO offside since it was triggered on Wednesday at $3.81.

With spot Crude Oil prices dropping over 3%, and below $47.50, during yesterday’s NY trade, the Short STO signal may look more attractive on Monday.

Santos

Crude Oil

 

 

 

ALGO UPDATE: Sell Sandfire Resources

Posted on | by Todd | Leave a Comment on ALGO UPDATE: Sell Sandfire Resources

Our ALGO engine triggered a sell signal in Sandfire Resources on the ASX close on Friday at $6.44.

The WA-based copper producer has seen its share price rise over 17% since posting a low of $5.50 on August 29th. The spot price of copper has rallied 10.4% over the same period of time.

However,  NY High-Grade Copper futures fell 3.25% in overnight trade on reports that recent Chinese demand has peaked and a price correction in copper is forthcoming.

The recent share price action illustrates that SFR is strongly correlated to the spot copper price and could revert  lower if the spot price declines.

We will follow this ALGO signal closely and update for a potential trade strategy.

Sandfire Resources

NY High-Grade Copper

 

 

 

ALGO UPDATE: Buy Signal In MQG

Posted on | by Todd | Leave a Comment on ALGO UPDATE: Buy Signal In MQG

The ALGO engine triggered a buy signal on MQG at yesterday’s ASX close at $83.01.

The stock has dropped over 7% since posting an intra-day high at $89.35 on August 17th.

This swift decline has pushed internal momentum indicators into an “oversold” area, which the technical ALGO engine picked up on when creating the buy signal.

We remain cautious of the forward earnings potential in the local banking sector and will monitor this trade over the next few trading sessions.

At this point, we would consider any move in MQG up into the $84.90 area as a corrective reversion and an area to sell long holdings or establish short positions.

Macquarie Group