Take Profits On TWE

Posted on | by Todd | Leave a Comment on Take Profits On TWE

Back on February 15th, TWE announced that their first half net profit doubled to $136 million. Since then, the share price has traded from $11.20 to an all-time high of $13.63 yesterday.

We suggest taking profits in this price area or writing at-the-money covered calls to enhance the portfolio returns.

There’s no question that TWE has been a well-managed, success story in the beverage space and we’ll follow the ALGO engine to buy back in at lower levels.

Treasury Wine Estates

 

Gold Climbs To An 8-Week High…….NCM Up 1.5%

Posted on | by Todd | Leave a Comment on Gold Climbs To An 8-Week High…….NCM Up 1.5%

On May 6th, we posted a report on Gold which suggested the yellow metal was holding support levels at $1220.00 and had a medium-term target of $1260.00. At this time, NCM was trading at $20.10

Gold traded as high as $1281 in early Asian trade today and NCM is finally joining the rally. The stock  has reached a two-week high of $21.78 and internal momentum indicators are looking constructive for a move higher.

We’re still expecting higher prices in both, with the next resistance level for gold at $1293.00, and the May 18th high of $22.20 for NCM.

Newcrest Mining

 

 

 

 

Buy The Pullback In Origin

Posted on | by Todd | Leave a Comment on Buy The Pullback In Origin

Origin Energy has been trading in a broad range between $6.70 and $8.10 over the last four months.

We recently took profits for client portfolios at $8.00 and are currently looking for a retracement into the $7.50 area to re-enter long positions.

The recent weakness in crude oil has had a dampening effect on various energy names. However, we feel Origin’s natural gas assets will keep the share price fairly well bid over the medium to longer-term.

Origin

 

Iron Ore Slips Below $60.00

Posted on | by Todd | Leave a Comment on Iron Ore Slips Below $60.00

Spot prices of Iron Ore fell again overnight  dropping to a fresh seven-month low. The 62% grade was down over 2.5% to close at $57.02 per ton.

During the month of May, Iron Ore dropped over 17%, extending its decline from the multi-year high of $95.00 last traded in February.

Mining names BHP, RIO and FMG are all under pressure in early trade losing more than 1% each.

FMG has reached an eight-month low of $4.70. We see the next downside targets on Rio and BHP at $59.50 and $22.50, respectfully.

Rio Tinto

BHP

Fortescue Metals

 

US Financials – Goldman Sachs

Posted on | by Leon Hinde | Leave a Comment on US Financials – Goldman Sachs

Regular readers of the blog will recall the Goldman Sachs post we made on the 19th May 2017, (the post referenced the downward channel GS was tracking).

In the last few trading sessions, the stock rallied to the resistance within the channel and has now moved sharply lower in overnight trade. 

Goldman Sachs was down 3.3% and was the worst performing Dow Jones stock in the overnight session.  As the US reflation trade loses momentum, the bounce in the US financials has met renewed selling pressure at “lower high” levels.

The chart below shows Goldman Sachs’  sharp reversal.

Chart – Goldman Sachs
Chart – JPM

 

ALGO Buy Signal In Medibank

Posted on | by Todd | Leave a Comment on ALGO Buy Signal In Medibank

The ALGO  engine triggered a buy signal on yesterday’s close for MPL at $2.72.

Internal momentum indicators are showing an oversold condition, which doesn’t rule out a test of the January lows near $2.60.

As a defensive name in an increasingly uncertain market, we suggest buying shares of MPL and using a derivative overlay strategy to  enhance the returns.

We still see limited revenue growth and material resistance in the $3.00 area. However, with the 4% dividend yield and income from the option premium, we see the stock as positive income contributor to client portfolios.

Medibank

 

 

 

Banks Sell-Off – Where’s Support

Posted on | by Leon Hinde | Leave a Comment on Banks Sell-Off – Where’s Support

We’ve been net sellers of the banks and we continue to remain cautious. The probability of discounted rights issues, increasing bad debts, reduction of dividends and little or no revenue growth, hardly makes for a  compelling investment case.

However, the chance of the washout being completed in one continued move lower, is low. Normally, we’d expect to see value investors step in at some point and create a more structured decline, with reasonable rallies within the broader downtrend.

With the above in mind, I’ve looked at the MVB Bank ETF and based on a 50% retracement, we’re now within 5% of the likely support area. Any bounce will be moderate and investors should again look to sell the rally.

Our Algo Engine will continue tracking the entry signals.

Chart – MVB

 

 

Wesfarmers – Yield Support

Posted on | by Leon Hinde | Leave a Comment on Wesfarmers – Yield Support

Wesfarmers will be providing a strategy briefing day on the 7th of June, it’s possible commentary from the presentation will add buy-side support to the stock price.

Our FY18 forecast revenue is $72b, EBIT $4.8b, EPS $2.82 & DPS $2.44, placing the stock on a forward yield of 5.7%.

Over the past 3 years any pullback in the share price to the $40- $42 range has provided a good entry level. Resistance or selling has occurred at or near $45.

Chart – WES

 

 

 

Solid Gains For Gold

Posted on | by Todd | Leave a Comment on Solid Gains For Gold

After posting a low on May 9th at $1215.00, Gold touched a high $1270.00 in late NY trade on Friday. Internal momentum indicators are looking constructive for a move back to the April high of $1295.00

For investors looking to profit from a higher gold price, we suggest buying shares of NCM, EVN, or the BetaShare Gold ETF with the symbol: QUA. 

We have a medium-term target for NCM at $25.50, $3.00 for EVN and $14.00 for QUA.  Newcrest Mining

Evolution Mining

 

BetaShare Gold ETF