BHP & RIO – Iron Ore Prices Reviewed

Posted on | by Leon Hinde

The following graph displays the long term trend in Iron Ore prices and below that is the 1-year price history.

Iron Ore prices have held up surprisingly well during the early stages of the market sell-off.  We do have some concerns that resistance remains in the high USD$80 per tonne range and the pressure is now to the downside.

This forecast feeds through to our forecast for BHP & RIO, where we feel investors are best served by waiting for entry levels at lower prices.

9-year history

1-year history

 

NAB – Profit Hit

Posted on | by Leon Hinde

We expect National Australia Bank to run into selling pressure at $16.50. We favour the short side of this trade.

Today NAB announced first-half earnings will take a $1.14 billion after-tax hit – even before the impact of the coronavirus is accounted for.

NAB said investors will have to wait until it reports its half-year numbers on May 7 to see the impact of the pandemic on its “earnings and balance sheet including provisions, combined with capital and dividend implications”.

BBOZ – A Market Hedge

Posted on | by Leon Hinde

Betashares Australian Equities is the Australian Equities Strong Bear Hedge Fund. The inverse ETF provides an approach to profit from, or protect against, a declining Australian sharemarket.

The ETF is designed to generate magnified positive returns when the market goes down (and vice versa) if the market was to rise.

As a technical reference point, we’re increasing our market hedging whilst the XJO index remains below the 5533 level.

The inverse BBOZ ETF will likely find support should the XJO continue to struggle below the 5533 resistance.

Oil – Negotiation Games Begin

Posted on | by Leon Hinde

Oil prices fell almost 10% overnight after rallying 37% at the end of last week.

The rally last week was ignited following President Donald Trump saying to CNBC on Thursday that he expected Russian President Vladimir Putin and Saudi Crown Prince Mohammed Bin Salman to announce a deal to cut production by up to 15 million barrels, and that he had spoken to both countries’ leaders.

The meeting was set for Monday and then “by no surprise really”, it was canceled on the weekend and maybe rescheduled for Thursday.

These on-again-off-again negotiations with OPEC are common. We expect a deal of some description to be reached and a production cut should be forthcoming.

Watch oil for a classic “FTFT” technical pattern. We look to buy the dip on this pullback.

30-year graph of oil.