We consider BHP a preferred holding within the ASX 50 model portfolio.
The Algo Engine generated a buy signal on May 5th at $22.60.
With both oil and iron ore prices remaining well supported, BHP should continue to find buying interest.
Consider a stop-loss below $25.00 and sell $29.50 March call options to enhance the yield.
BHP
Our Algo Engine has flagged the higher low formation in the iShares ETF, IZZ China Large Cap.
IZZ has retraced from $65 last month to a low of $58.61 in Thursday’s session. Following stronger data out of China on Friday, the ETF had a strong close to the week.
Consider buying with a stop-loss below $57.40
Since posting a low of $3.34 on November 28th, shares of Telstra have gained over 10% reaching a high of $3.72 in early trade.
Much of this recent optimism in the company stems from TLS wrapping up the second phase of their transmission network upgrade and deploying their high capacity optical technology, which is known as “5G”
This increased capacity and faster download speed is shaping up as a winner as TLS is outperforming its rivals on the new iPhone X and iPhone 8 orders.
Because TLS has greater network capacity, they are able to charge a premium on these new mobile phone systems.
Technically, the next price hurdle will be at $3.83, which is the bottom end of a gap lower on August 29th.
Telstra
The Aussie Dollar dropped close to 1% overnight as yesterday’s domestic trade balance numbers showed a steep contraction for the month.
The AUD/USD hit a six-month low at .7500 as the trade surplus fell to $105 million from $1.6 billion the month before. The street had expected a surplus of $1.4 billion……10 times higher than the actual print.
The sharp drop was driven by a 3% fall in exports and a 2% increase in imports. Details of the report showed much lower levels of exports of Iron ore and coking coal.
There are several names on the ASX that earning revenue overseas and will benefit from the falling Aussie Dollar.
These include QAN, RHC, TWE and NCM.
QANTAS
Ramsay Health Care
Newcrest Mining
Treasury Wine Estates
Did your miss our Webinar last night on our Charts and the Algo Engine? You can watch the replay below.
Our final webinar in the 3 part series will be held on Wednesday the 13th of December 2017 at 12:30pm QLD time, 1:30pm NSW/VIC time and 1:30am WA time. This is a daytime session. The topic will be Trading ASX 50 CFDs with Saxo Go.
Our ALGO engine triggered a buy signal in QAN on November 24th at $5.60.
In the days after that, the share price slipped down to $5.30 as crude oil prices rallied into the OPEC meeting and the Aussie Dollar traded back into the .7600 handle.
Both of the those fundamental headwinds have been reversed and the share price has reached the $5.50 level in early trade.
Shares of QAN are over 70% higher than the January lows, which makes the company one of the best performers on the ASX this year.
We expect that the combination of their share buy-back program, lower operating costs and rising international capacity growth will support the share price into Q1 2018.
Investors looking to profit from QAN shares can either buy them outright or buy their CFDs on our SAXO Go platform.
QANTAS
Scentre Group will deliver 3% EPS growth in FY18 and trades on a 5% forward dividend yield.
The stock price has rallied from $3.85 to $4.28 over the last two months and we feel the price now reflects full value for SCG.
Sell $4.30 covered calls into June and maintain exposure to the February dividend.
Our Algo Engine generated a buy signal in AGL on 23/8/17 at $22.64.
We continue to like AGL as an income trade in portfolios. Buying at these levels and selling a slightly out-of-the-money call option, (whilst keeping exposure to the $0.41 dividend paid on the 23rd February), generates 10 – 12% cash flow on an annualised basis.
Aristocrat Leisure is forecast to grow earnings in FY18 at 18%, placing the stock on a forward yield of 2% and price to earnings ratio (PE) of 23x. Whilst, the stock is expensive, the valuation is supported by a “top tier” earnings growth profile.
Our Algo Engine triggered a buy signal in ALL on 28/7/17 at $19.83, the strong buying interest in yesterday’s session, (ALL went ex div $0.20), provides confidence that the upside momentum will continue.
Crown has made an aggressive push higher after finding renewed buying support at the $11.93 low in yesterday’s session.
Our Algo Engine generated a buy signal in Crown on the 28/9/17 at $11.13
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