JHX Points Lower On Weaker US Housing Data

Posted on | by Todd | Leave a Comment on JHX Points Lower On Weaker US Housing Data

Since trading as high as $23.20 on May 2nd, shares of JHX have dropped over 14% and are now trading below $19.80.

We posted a report on the blog on May 19th pointing out that JHX reported FY17 results which were below market expectations.

Overnight, US New Home Sales fell to 569,000, well short of the consensus expectation of 610,000. As new home construction continues to slide, we sell further downside range extension for JHX.

The new key support level comes in near the February low of $18.20.

James Hardie

 

Gold Firms, But NCM Still Lags

Posted on | by Todd | Leave a Comment on Gold Firms, But NCM Still Lags

On May 6th, we posted a report on the blog which suggested that both Spot Gold and shares of NCM were in oversold territory.

At that time, the prices were at $1225.00 and $20.10, respectively. Now, Gold is back over $1250 and looking firm on the internal momentum indicators. We expect the yellow metal to test April 17th high on $1290.00 in the medium-term.

In this sense, shares of NCM have lagged behind the spot gold price and have gained just over $1.00 during the same period.

We still consider NCM undervalued at current prices and suggest buying outright shares, or call options out to July, for a medium-term price target of $25.50.

Newcrest Mi

 

Chart Watch – XJO Index

Posted on | by Leon Hinde | Leave a Comment on Chart Watch – XJO Index

The XJO chart is showing the first lower low structure we’ve seen for some time.

The broader trend, which has been in place since  February 2016 is likely in the early stages of breaking lower. Any bounce higher from last week’s selling, is likely to be limited and investors should look to protect their portfolios.

New selling will likely occur within the range of 5790 and 5850, creating a lower high formation as a strong sell side signal.

Chart – XJO

 

 

 

 

Algo Buy Signal – Resource Sector

Posted on | by Leon Hinde | Leave a Comment on Algo Buy Signal – Resource Sector

With the recent sell-off in commodity names, the Algo Engine has triggered buy signals in a number of big and small cap companies.

Our preferred resource allocation remains BHP, over other alternatives. However, it’s worth taking note of the recent buy signals in RIO, FMG, IPL and in OOO, the BetaShares Oil ETF.

We look to take profit in BHP at $25, after buying at or near $22.50.

Chart – Oil

 

 

ALGO Engine Buy Signal For NAB

Posted on | by Todd | Leave a Comment on ALGO Engine Buy Signal For NAB

The ALGO engine triggered a buy signal for NAB at $30.40 on Friday.

NAB shares have dropped over 11% since posting an intra-day high of $34.00 on May 1st. Several internal momentum indicators are showing an overbought condition.

With US equity markets stabilizing after Wednesday’s sharp sell off, it’s likely that all the local banking names will get a lift when the ASX re-opens on Monday.

We see scope for a corrective bounce into the $32.50 area, and suggest looking to buy NAB shares outright, or consider buying the $32.00 call options into June.

Aussie Dollar Pops Higher After Jobs Data

Posted on | by Todd | Leave a Comment on Aussie Dollar Pops Higher After Jobs Data

The AUD/USD traded higher after yesterday’s domestic employment numbers beat expectations.

With headline jobs growth reported at 37.4k (versus 4.5K consensus) the AUD/USD pushed against the resistance level at .7450.

We don’t expect these data to move the RBA from their easing bias and, if benchmark overnight rates are going to move, the likely direction will be lower, not higher.

Investors who want to profit from a falling AUD/USD can buy the BetaShare ETF with the symbol: YANK.

YANK is an inverse EFT, which means that the unit price trades higher as the AUD/USD moves lower. YANK is also weighted, so that a 1% fall in the currency translates to a 2.5% gain in the unit price.

When the AUD/USD traded down to .7330 last week, the unit price of YANK was $15.54. We estimate that if the AUD/USD trades back to the January low of .7150, the price of YANK will be $16.50, or an approximate 10% gain from current levels.

YANK ETF

 

 

 

 

 

 

Orica Slips On Lower Earnings

Posted on | by Todd | Leave a Comment on Orica Slips On Lower Earnings

Orica Limited has reported that their 1H17 net profits after tax was $195 million, which beat the expectations of $185 million.

However, ORI shares are down close to 2% at $18.26 as revenues fell and guidance on key Ammonium-Nitrate prices are pointing lower.

An oversupply of Ammonium-Nitrate will likely act as a drag against future earnings and cap the share price below $19.25.

 

BHP Assets Are In Play

Posted on | by Todd | Leave a Comment on BHP Assets Are In Play

Shares of BHP have opened firmly above $24.00 as overnight comments from Andrew Mackenzie confirm the company is likely to spin off some assets in the near-term.

Mackenzie was addressing a major mining conference in Barcelona when he gave the strongest indications yet that BHP might be giving ground to New York hedge fund Elliott Management’s aggressive bid to break up the mining giant.

As such, we see this development as underpinning the stock, even as Crude Oil and Iron ore prices remain in the lower end of their 6-month trading ranges.

The ALGO engine triggered a buy signal for BHP on May 5th at 22.50. Over the last few days, we have suggest taking profits on long positions above $24.00 and looking to re-enter at lower levels.