We recommend the short side of Orica heading into 2H18 earnings announcement on 7th May.
The market is looking for significantly stronger 2H performance and is likely to be disappointed. Orica is trading on stretched valuations and offers a 2.6% forward yield.
Look to sell within the range displayed below.
Orica
IPL reports 1H18 earnings on 9 May.
A key focus in the upcoming result will be the production performance at key locations & progress on formalising the Central Petroleum interim
gas agreement for Gibson Island and gas discovery JV.
IPL was added to our ASX50 model portfolio in May 2017.
Commodities are going through a topping pattern, or at least building resistance at the current level, we encourage investors to take profit in IPL.
2019 EPS $0.23, DPS $0.12 places IPL on a forward yield of 3%.
IPL
Following the recent Algo Engine buy signal, we view the “higher low” technical setup in Tabcorp as a bullish pattern.
From a fundamental earnings perspective, we also see the stock price strengthening into the August earnings result. We expect to the stock price supported by post merger cost savings and moderate organic growth.
Tabcorp
Shares of GPT are up 1.5% in early trade in front of its AGM scheduled for Wednesday.
In the March quarter, GPT reported total shopping center comparable MAT growth of 2.1%, with 34,100 sqm of leasing space signed in the quarter and the acquisition of Sunshine Business Park in Melbourne for $74 million, with an initial yield of 6.1%.
The share price has hit $4.80 so far this morning and will see further resistance in the $5.00 area.
We consider GPT a solid “Buy/Write” strategy at current levels as the sold call option premium will enhance portfolio cash flow.
GPT will pay a 12.3 cent dividend on June 29th, which places its annual yield around 5.00%.
General Property Trust
With resources looking fully valued and the banks unlikely to stage any meaningful recovery, we feel the XJO index is now approaching resistance.
6000 points is an area where we’ll be watching for selling pressure to increase.
ASX XJO Index
Over the last three weeks, the $33 billion takeover offer of WFD by French commercial property company Unibail-Rodamco has moved a few steps closer to completion.
Following the approval from French regulators, the Australian Foreign Investment Review Board also gave the transaction the green light to proceed; shareholders will vote at the AGM on May 24th.
As illustrated in the charts below, since part of the $10.00 per share offer includes Unibail script, the price of WFD has been following price of Unibail shares higher.
WFD was added to our ASX Top 20 Model Portfolio on February 7th at $8.90 and our ALGO engine triggered a buy signal on the same day.
Technically, the December high of $9.77 is the next key level of resistance. We suggest shareholders look to add to long positions into the AGM and take profits or use a covered call strategy in the $9.70 price range.
This has been a very popular trade on our SAXO Go CFD platform. For more information on WFD or CFD trading opportunities, call our office at 1-300-614-002.
Unibail-Rodamco
Westfield Corp LTD
Our ALGO engine triggered a sell signal in WPL into the ASX close yesterday at $32.20.
This corresponds to the ALGO buy signal triggered on February 20th at $29.10. Investors who followed this trade would have gained over 10% on the trade.
As noted in previous postings, the WPL share price is closely correlated to the price of WTI crude oil, which has been trading near 4-year highs over $68.00 per barrel.
Recent increases in crude oil supplies have been offset by political tensions in the Middle East, which have kept oil prices buoyant.
We believe that WPL shares are overbought and susceptible to trading lower along with spot crude oil prices. As such, we suggest exiting long WPL positions near the $32.35 level.
Woodside Petroleum
Following the Algo buy signal, S32 was added to the ASX50 model portfolio in February 2017 at $2.50.
The stock price rallied to $4.00 this year, then sold-off and created a “lower high” formation; an Algo sell signal was generated last week.
We continue our technological research in algorithm trading and remain encouraged by historical testing results.
We’re increasingly applying the rule -based model into our broader portfolio management style.
S32
Our Algo Engine triggered a recent buy signal in AGL and, with the stock price finding support at $20.50, we recommend investors add long exposure.
Our upside price target is $23.00.
AGL goes ex-div $0.54 on the 23rd August.
AGL
Shares of NCM have reached a six-week high of $20.92 even though the mining giant has cut its full year gold output forecast.
The lower production guidance is mainly on the back of a tailing dam collapse which halted operations at its Cadia mine in NSW. Cadia is NCM’s biggest and lowest-cost mine.
NCM produced 575,791 ounces of gold in the three months to March 31, down 6% from the previous quarter.
The miner now expects full year gold output to be between 2.25 and 2.35 million ounces, down from its previous estimate of between 2.4 and 2.7 million ounces.
We believe that NCM has more upside potential as the price of Gold remains stable above $1300.00 and the AUD/USD has just dropped 3% over the last 10 days.
Technically, the next resistance area is near the chart gap at $21.15. Above that level will point to the March high of $22.30.
NCM is part of our ASX Top 50 Model Portfolio.
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