Gold/Newcrest Break Higher

Posted on | by Todd | Leave a Comment on Gold/Newcrest Break Higher

As Wall Street stocks moved lower, gold prices continued to attract “safe haven” flows.

As mentioned in our earlier post, the yellow metal met technical resistance at the 30-day moving average price of $1230.00 last Friday.

However, with global equities correcting from recent highs, the next key resistance level will be the February 27th high of $1263.00.

Similarly, shares of Newcrest Mining have broken above the 30-day moving average and now look set to test the February 23rd high at $23.45

Algo Signal – SYD & TCL

Posted on | by Leon Hinde | Leave a Comment on Algo Signal – SYD & TCL

The Algo Engine flagged SYD as a short signal yesterday. At this stage, we’re thinking SYD trades sideways, (rather than lower), and consolidates heading into the June dividend.

With the stock at or near $6.50, it places SYD on a 5% yield and when complimented with a tight covered call, we’re able to generate 12% annualized cash flow. If price breakdowns below $6.25, we’ll reassess the strategy.

Utilities & REIT’s, (SYD & TCL), are benefiting from US yields retreating from recent highs.

Chart – SYD
Chart – TCL

 

 

GOLD/Newcrest Approach Resistance Levels

Posted on | by Todd | Leave a Comment on GOLD/Newcrest Approach Resistance Levels

Both the share price of Newcrest Mining and Spot Gold rallied sharply last week.

As such, both are now trading against the key technical resistance at the 30-day moving average areas of $22.00 and $1230.00, respectfully.

Looking ahead, the question is whether the inverse correlation between global equity prices and Gold continues, and whether that will continue to lift the shares of Newcrest?

On Friday, the daily trading volume in Newcrest was 12.7 million shares.

This is more than twice the average daily turnover of 5.5 million and the largest volume day since 18.5 million shares were traded on June 24th, 2016.

Generally, an up-day in the share price, on expanding volume, is a positive sign for further gains in the share price.

At this point, we don’t have a buy signal from the ALGO engine but will watch the price action closely.

Chart – NCM

TABCORP Fined $45 Million

Posted on | by Todd | Leave a Comment on TABCORP Fined $45 Million

Tabcorp has agreed to pay the largest civil penalty in Australian corporate history yesterday, as company officials admitted that they had failed in it’s obligation to strictly follow domestic Anti-money laundering laws.

The gaming company agreed to pay $45 million to the Federal Government and pledged to modify its protocol for management oversight and operational execution of their money laundering program.

We feel the “silver lining” to this story is that the ACCC will take a favorable view of Tabcorp’s admission of oversight and commitment to increasing internal surveillance when ruling on the pending merger with Tatts group.

Shares of the company have traded back to support at $4.50 in early trade. We view Tabcorp as a $5.00 stock in the medium-term and suggest adding to long positions at these levels.

Amcor – Finding Support

Posted on | by Leon Hinde | Leave a Comment on Amcor – Finding Support

Amcor looks like it is finding support at $14.25 and could trade up to $15.00.

With the stock on a  4% forward yield and earnings likely to grow at 4 – 8% p/a we think this makes a AMC a good buy-write strategy.

The August dividend plus the call option income is generating over 10% annualised cash flow, whilst still allowing 5% capital growth over the next 6 months.

Chart – AMC

Bendigo Bank – Algo Buy Signal

Posted on | by Leon Hinde | Leave a Comment on Bendigo Bank – Algo Buy Signal

Our Algo Engine is flagging BEN with a technical buy signal.

We’re mindful of the downward pressure on the banking sector following today’s weak employment data.

Therefore, we’re not buyers at present, but we’ll be watching BEN and looking for the short term indicators to turn positive at or near the $11.00 support level.

Chart – BEN

 

 

 

FED Lifts Rates, Gives Cautious Guidance

Posted on | by Todd | Leave a Comment on FED Lifts Rates, Gives Cautious Guidance

The US Federal Reserve raised the benchmark Fed Funds rate by 25 basis points to a range of .75% to 1%.

The FED’s “Dot Plot” Table of FED members’ projections for short-term interest rates showed three hikes in 2017, three in 2018 and three in 2019, which is unchanged from the prior forecast in December.

While the rate adjustment was expected, the unchanged forward guidance in the dot plots fell short of the street’s expectations. Many analysts’ were looking for a higher rate trajectory into the middle of 2018.

One reason given for the cautious outlook was the sharp fall in GDP growth for Q1 2017.

The Atlanta FED GDPNow tracker has been revised down to .9% from 1.9% in December.