Technical Update For CCL

Posted on | by Todd | Leave a Comment on Technical Update For CCL

Since posting an intra-day low of $7.52 on November 24th, shares of CCL have been carving out an ascending flag formation.

This is a bullish continuation pattern and is bounded by support at $8.05 and resistance at $8.65. A break of the $8.65 level would point to a measured move targeting the June highs near $9.40.

CCL is due to report earnings next Wednesday, the 21st.

In late November, the company advised that profits for the 12 months to December were expected to be $13 million higher than the consensus of $405 million.

CCL is scheduled to pay a 25 cent dividend on February 27th. At the current price, that pencils out to an annual yield of 5.5%.

Technically, an ASX close above $8.45 would suggest range extension to the $8.65 level.

Coca Cola Amatil

 

 

 

 

 

IAG Posts New All-Time High On Stronger Guidance

Posted on | by Todd | Leave a Comment on IAG Posts New All-Time High On Stronger Guidance

Shares of IAG have rallied over 2.5% in early trade, hitting an all-time high of $7.89, as the company lifted their earnings guidance for the year ahead.

The general insurer reported a 23 % increase in net profit after tax, which hit $551 million in the six months to December, helped by price rises in its consumer and commercial insurance products.

IAG also reported insurance margin widened to 17 %, compared with 13% a year earlier. Further, the company lifted its dividend by 1 cent to 14 cents, which will be fully franked and paid on the 29th of March.

IAG has been in our Top 50 Model Portfolio since January of last year.

We suggest investors can sell the 7.50 calls into June for 25 cents. This will increase cash flow into the portfolio and allow for the 14 cent dividend.

Insurance Australia Group

 

Welcome to our Morning Review video report

Posted on | by Leon Hinde | Leave a Comment on Welcome to our Morning Review video report

We look at the likely point of price resistance, as the Dow Jones Index reverses from Friday’s session lows.

CBA & WFD were recently added to the ASX Top 20 model portfolio.

In addition,  OSH & STO have now been added to the ASX Top 50 model.

Add to your watch-list RMD, CIM, MPL, AGL & AMC.

Also, watch the IZZ.AXW (China Large-Cap) ETF to see if $59 support will hold.

The video runs for 4 minutes and if you’d like to discuss the ideas presented,  please call our office on 1300 614 002.

A Buy/Write Strategy For AMCOR

Posted on | by Todd | Leave a Comment on A Buy/Write Strategy For AMCOR

Shares of AMC continue to hold above $14.40 after yesterday’s sharp reversal off of the $13.70 low.

After announcing their H1 net profit of USD330 million, versus USD309 million last year, the packaging giant lifted its interim dividend by 8% to 21 cents.

We are holding AMC in our ASX Top 50 model portfolio and consider the stock a “buy/write” name over the medium -term.

As such, we would look to sell the $15.00 call into June, which would allow investors to collect the February dividend of 25.6 cents and enhance portfolio returns with the call premium.

Amcor

 

 

 

 

WTI Drops 3% On Higher US Production

Posted on | by Todd | Leave a Comment on WTI Drops 3% On Higher US Production

West Texas Intermediate (WTI) crude oil fell to a seven-week low of $58.07 per barrel, before paring losses to close Friday’s NY session down 3.2%  at $59.20.

This was the sixth consecutive day that Crude oil has traded lower. For the week, crude oil was down nearly 10%.

WTI broke below $59 a barrel after Baker Hughes reported the U.S. oil rig count rose by 26 rigs to 791, the highest total since April 2015.

The week’s losses accelerated on Wednesday after AEI data showed weekly U.S. production jumping to a record 10.25 million barrels a day. Meanwhile, the nation’s stockpiles of crude rose for a second straight week.

Our ALGO engine triggered a buy signal in both OSH and WPL on Friday’s close.

We expect the sharp down move in WTI to push both OSH and WPL back in the buy zone near last week’s lows of $7.20 and $31.05, respectively.

Oil Search

Woodside Petroleum

 

Higher US Rates Pushes AUD To A Two-Month Low

Posted on | by Todd | Leave a Comment on Higher US Rates Pushes AUD To A Two-Month Low

The AUD/USD made an intra-day high of .8135 on January 26th.

At the time, we noticed that this had a potential for a “double top” formation relative to the .8125 high posted on September 28th.

The Aussie traded down to .7760 overnight and the internal momentum indicators are now pointing lower.

The fundamental reasoning for the recent fall has been the divergence in interest rates between the USA and Australia.

Since January 1st, the US 10yrs have risen from 2.4% to 2.85%. Over the same period, the AUD 10yrs have traded from 2.65% to 2.85%.

We expect this divergence to continue this year as the FED continues to tighten rates and the RBA remains neutral. At this point, the US 10yrs have a high target of 3.25%.

This estimate is based on the FOMC raising rates 3 times during 2018, which would correspond to the AUD/USD trading back to .7150.

Investors looking to profit from a lower AUD/USD can buy the BetaShare ETF with the symbol: YANK.

YANK is an inverse ETF, which means the price of YANK increases as the AUD/USD trades lower. It also has a weighting of 2.5%, which means the unit price will fluctuate  by 2.5% for every 1% change in the AUD/USD exchange rate.

With a current price of $13.20, we calculate that the price of YANK will be near $16.50 as the AUD/USD returns to the January 2017 low of .7160.

BetaShare ETF: YANK

 

Morning Report – Opportunities in Review

Posted on | by Leon Hinde | Leave a Comment on Morning Report – Opportunities in Review

Welcome to our Morning Review video report.

We look at the reversal in Dow Jones overnight and the BBUS, BBOZ & Yank ETF’s which benefit from further US equity market weakness.

WFD was added to the ASX 20 & 50 model portfolio yesterday.

The video runs for 10 minutes and if you’d like to discuss the ideas presented,  please call our office on 1300 614 002.

 

Newcrest Mining Is Approaching The Buy Zone

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

The price of Spot Gold has dropped over $40.00 since last Friday.

As a result, shares of Newcrest mining have fallen close to $2.00 and posted a 4-month low of $21.20 earlier today.

We expect good support in the spot Gold market near the $1300.00 area.

This roughly pencils out to the $20.80 level for NCM shares.

We suggest keeping NCM, as well as the smaller Gold producers, on the radar for a buying opportunity if spot Gold holds the $1300.00 level over the next few trading sessions.

Newcrest Mining

Tabcorp Trades Lower On Weaker H1 Earnings

Posted on | by Todd | Leave a Comment on Tabcorp Trades Lower On Weaker H1 Earnings

Shares of Tabcorp have dropped over 5% in early trade as H1 results were dampened by Tatts acquisition costs and weaker earnings from their UK start-up, Sun Bets.

The wagering giant posted a statutory net profit of $102 million, which was down 16% from a year ago. This included a $25.5 million charge in significant items related to the Tatts merger costs.

All together, the Tatts acquisition costs represented a one-off $59.3 million drag to the bottom line.

The company announced a fully franked interim dividend of 11¢ cents per share, payable on March 13.

We expected a much better H1 result for TAH and still believe the merger will prove profitable this year.

As such, we see value in the stock in the $4.80 area and expect the previous high price of $5.70 to be challenged over the medium-term.

Tabcorp