Gold Jumps On North Korean Missile Launch

Posted on | by Todd | Leave a Comment on Gold Jumps On North Korean Missile Launch

Earlier this morning, North Korea launched a ballistic missile that flew over the Northern part of Japan and landed in the Pacific near Hokkaido.

The missile was fired from the Sunan region around 7:30 am, Sydney time, and flew approximately 2,700 km at an altitude of about 550 km.

Both South Korea and Japan responded with a strong statement denouncing Pyongyang’s sharp escalation of tensions in the region.

Gold was already $12.00 higher after the US session and added another $8.00 after the news broke this morning. As illustrated on the chart below, spot Gold broke above  a 7-year downtrend line and reached a high of $1324.50.

In an environment of global economic uncertainty and heighten geo-political tensions, we still prefer the long side of Gold and see the next resistance level at $1340.00

We still see scope for more upside in the local Gold names. Both Newcrest and Evolution are trading over 2.5% higher in early trade. We consider an upside target of $23.60 in NCM and $2.95 in EVN as reasonable price targets.

Spot Gold

Newcrest Mining

Evolution Mining

 

More Troubles For The CBA

Posted on | by Todd | Leave a Comment on More Troubles For The CBA

Shares of CBA have posted a new low for the year at $76.55  as APRA announced that they will be setting up an inquiry after a series of problems prompted concerns about the bank’s culture, leadership and accountability.

This is  not a good addition to CBA’s current AML allegations from AUSTRAC and a class action suit filed on the behalf of shareholders.

On balance, we don’t see any obvious catalyst to drive any of the domestic banking names higher and CBA now has the weakest technical structure.

The next key price support for CBA will be found near the October 2016 area near $75.00.

  Commonwealth Bank

 

 

 

 

Algo Update – TCL, SYD & AMC

Posted on | by Leon Hinde | Leave a Comment on Algo Update – TCL, SYD & AMC

Following recent Algo Engine buy signals, we’ve seen solid price performance in TCL, SYD & AMC.

At the time of the algo buy signal, we highlighted these stocks to members as preferred buying opportunities.

However, we now see the stocks as near full value. Yields have compressed relative to 12 month EPS growth and investors should look to take profit, or sell at the money covered call options.

AMC
SYD
TCL

 

 

 

 

NYSE Internal Indicators Weaken Further

Posted on | by Todd | Leave a Comment on NYSE Internal Indicators Weaken Further

As the major US stock indexes gyrate on fundamental economic reports and political developments relating to tax reform and debt ceiling legislation, many technical indicators are reflecting the deterioration of upside price momentum.

The chart below illustrates that the percentage of NYSE stocks trading above their 200-day moving average has decreased at a brisk pace over the last month.

When this indicator moves below 50%, it is saying that fewer stocks are supporting the overall index price level.

Historically, this has resulted in at least a 5% correction in the SP 500 over the near-term.

On that basis, the 4-week target for the SP 500 would be in the low 2300.00 area.

NYSE Breadth

 

 

ALGO Update: Sell Signal In QRE

Posted on | by Todd | Leave a Comment on ALGO Update: Sell Signal In QRE

Our ALGO engine triggered a sell signal in the BetaShares Resource ETF with the symbol QRE at $4.85.

QRE is comprised of 10 ASX stocks which include BHP, Bluescope Steel and Caltex. The weighting is such that BHP, RIO and WPL make up over 50% of the ETF pricing.

Frequent blog readers will remember that we had a generally bullish outlook on the resource sector back in mid-March, and advised clients to buy QRE in the $4.50 area and BHP in the $22.50/70 price range.

We now agree with the ALGO engine that the resource names look fully valued overall.

We suggest that investors who are holding BHP can either take profits in the $26.25/50 area, or write covered calls at $26.50 into November to enhance portfolio returns.

BetaShare ASX Resource ETF: QRE

 

BHP