ALGO Update: LLC Is Approaching Overbought Territory

Posted on | by Todd | Leave a Comment on ALGO Update: LLC Is Approaching Overbought Territory

Our ALGO engine triggered a sell signal in LLC into the ASX close at $17.88.

The “lower high” pattern is referenced to the October 17th high of $18.70.

Shares of LLC have risen about 16% since posting solid H1 results three weeks ago, which included a $500 million share buyback scheme over the next 12 months.

However, the internal momentum indicators are now approaching overbought territory.

We see strong technical resistance in the $18.15/20 area and expect the share price to revert back to the $17.20 support area over the near-term.

Lend Lease

 

ALGO Update: Buy Fortescue Metals

Posted on | by Todd | Leave a Comment on ALGO Update: Buy Fortescue Metals

Shares of FMG are flat after the company announced a refinancing package which will lower their annual borrowing costs by more than US$130 million per year.

The package is in the form of US$ 500 million of senior unsecured notes at 5.125%.

This is a significant improvement to FMG’s capital structure, reflects confidence from senior management,  and should give the share price a boost over the near-term.

FMG is part of our ASX Top 50 model portfolio and our ALGO engine triggered a buy signal at $4.70 on May 15th.

We prefer the long side of FMG from $5.00 and suggest that inventors add the stock to their portfolio holdings.

Fortescue Metals Group

 

 

 

BlueScope Shares Retreat On US Tariff Threat

Posted on | by Todd | Leave a Comment on BlueScope Shares Retreat On US Tariff Threat

Shares of BlueScope Steel rose to an eight-year high of $16.80 just after the ASX open today.

However, after Mr Trump’s announcement earlier to impose sweeping tariffs on imported Steel and Aluminium, BSL shares have slipped back to $16.35.

In its current form, the legislation would put a 25% tariff on the cost of imported steel to the US, regardless of the country of origin.

BSL is the sole exporter of Aussie steel to the US market which is worth about US$130 million per year.

Our ALGO engine triggered a buy signal for BSL on February 6th at $14.15.

At this point, we suggest that investors either exit their long positions outright, or look to sell the $17.00 calls into April for 42 cents to enhance portfolio returns.

BlueScope Steel

 

 

Dow Jones Breaks 16-Month Winning Streak

Posted on | by Todd | Leave a Comment on Dow Jones Breaks 16-Month Winning Streak

The Dow Jones 30, along with the SP 500, has posted its first monthly loss since October of 2016.

This has been the longest monthly winning streak since 1959.

However, over the last two days, the DOW has lost over 700 points, or 3%.

And while these headlines will get the attention of investors, it’s the technical significance which should have investors concerned.

Both the DOW and SP 500 dipped below their respective 50-day moving averages, which opens up the probability of range extension to the downside.

As illustrated in the chart below, investors should be prepared to employ defensive strategies and take advantage of stock specific opportunities.

Dow Jones 30

 

 

 

Keep Ramsay On The Radar

Posted on | by Todd | Leave a Comment on Keep Ramsay On The Radar

Shares of RHC remain under pressure and have posted a 6-month low of $62.50 in early trade.

This is on top of yesterday’s 5.75% drop after a weaker profit report.

RHC, Australia’s largest private hospital operator, reported a 3.7% fall in H1 profit to $246 million; most of the weakness is from hospital operations in the UK.

From a technical perspective, the daily price chart shows solid support in the $61.50 to $61.20 area dating back to June 2016.

We’ll  update our signals on RHC and look for a reasonable level to enter the stock.

Ramsay Health

 

ALGO Update: SHL Still Looks Expensive

Posted on | by Todd | Leave a Comment on ALGO Update: SHL Still Looks Expensive

Our ALGO engine triggered a sell signal in SHL on February 5th at $24.85.

In the company’s recent earnings report, their 2018 guidance expects growth in the 6% to 8% range.

This places SHL at 22.5 times earnings, which is considerably higher than its industry peers.

Technically, the next key support level is found at the February 15th low of $23.10.

Sonic Health

 

ALGO Sell Signal For NAB

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

Our ALGO engine triggered a sell signal for NAB into yesterday’s ASX close at $30.40.

This “lower high” pattern is relative to the November 8th high of $31.85.

NAB posted an 18-month low of $28.05 on February 8th. The banking sector, in general, has had a respectable recovery over the last three weeks.

However, the internal momentum indicators now suggest that the local banking names will trade lower over the near-term, taking out the February lows.

NAB

 

Newcrest Is Approaching The Buy Zone

Posted on | by Todd | Leave a Comment on Newcrest Is Approaching The Buy Zone

Shares of NCM are down over 2% in early trade as Spot Gold prices traded 1% lower to $1317.00 in the NY session.

Selling in Spot Gold was triggered by comments from new FED chief Jerome Powell who said that the US central bank could lift rates up to 4 time during 2018.

We added NCM to our model portfolio on December 13th at $22.10.

Technical indicators suggest  solid support levels in the $20.80/90 area.

We estimate that price in NCM will correspond to Spot Gold near $1300.00 per ounce and will look to enter long positions near $20.80.

Newcrest Mining

 

 

 

 

 

Caltex – FY17 Earnings

Posted on | by Leon Hinde | Leave a Comment on Caltex – FY17 Earnings

Caltex FY17 earnings came in at the top end of the estimated range, at $620 million.

Caltex will announce the outcome of their asset review at the end of June.

We expect to see commentary around divestment of station freehold land, which should be a net positive for share holders.

FY19 outlook for revenue is 2% growth to $23 billion, EBIT $930 million , EPS $2.40 and DPS $1.20, placing the stock on a forward yield of 3.5%.

We consider CTX fully- valued at the current price range.

After buying at lower prices and selling the May $36 calls for $1.00 credit, we’ll be pleased to collect the upcoming dividend of 61 cents on March 12th, and then deliver the stock in May.