BHP Rebounds From Last Year’s Losses

Posted on | by Todd | Leave a Comment on BHP Rebounds From Last Year’s Losses

Shares of BHP are up over 1% in early trade as the mining giant announced a USD 6.73 billion full year profit and declared a final dividend of 43 cents per share, which lifts the full-year dividend to 83 cents per share.

Higher prices for both Iron ore and Coking Coal helped contribute to the improved performance over the course of the year.

The company also announced that it wants to sell off its US Shale oil assets, as they have not performed to plan.

In our blog update from July 26th, we suggested that investors could sell European-style call options at the $26.00 strike price into November.

We still see limited upside to BHP above $26.50 and repeat that suggestion to enhance portfolio returns for investors holding BHP shares.

BHP

 

Fortescue Shares Higher On Positive Earnings

Posted on | by Todd | Leave a Comment on Fortescue Shares Higher On Positive Earnings

Shares of Fortescue Metals Group opened firmer as the Iron Ore miner more than doubled its net profit to AUD 2.7 billion and pledged to pay shareholders a bigger dividend going forward.

FMG will pay a final, fully franked dividend of 25 cents per share, which pencils out to 52% of the company’s net profit after tax. The full year dividend was announced at 45 cents per share.

Looking into next year, FMG announced it would increase its dividend guidance to a range of 50 to 80% of net profit after tax.

We feel that the share price will run into resistance around the $6.10 level and aren’t buyers at these levels.

While Iron Ore has had a respectable price rebound off the $54.00 low posted in June, we don’t expect a protracted move higher back into the $80/82.00 range, which will temper the profit outlook for FMG.

Fortescue Metals Group

 

Algo Update – WOW & ORG

Posted on | by Leon Hinde | Leave a Comment on Algo Update – WOW & ORG

As the Algo Engine identified the “higher low” price pattern in both Woolworths and Origin Energy, we’ve regularly highlighted these as preferred buying opportunities.

We’ve remained buyers of ORG and WOW throughout the past 12 months but now feel that we’re approaching a level where we see full value.

Resistance in ORG will likely be found at or near  $8.00 and WOW is likely to experience selling based on valuation grounds at or near $27.50.

Chart – WOW
Chart – ORG

 

 

 

 

 

 

Gold Tops $1300 Intra-day

Posted on | by Todd | Leave a Comment on Gold Tops $1300 Intra-day

Gold prices touched their highest intra-day level of the year on Friday, temporarily topping $1,300 an ounce before pulling back to settle unchanged on the day.

Gold had traded up to $1,303 for the first time in 2017, getting a lift from safe-haven demand on the back of weakness in global equities, a terrorist attack in Barcelona and concerns about President Trump’s pro-business political agenda.

Despite the late pull back into the weekend, the technical picture in Gold looks constructive. On a “measured move” basis, the break above $1300 points to the November highs near $1340.00 as the next area of resistance.

We still prefer the long side of NCM, along with smaller-cap miners EVN, SAR and NST.

Our medium-term price target for NCM is $23.10 and $2.80 for EVN.

Spot Gold

Newcrest Mining

Evolution Mining

Algo Update – Sell Signal Commonwealth Bank

Posted on | by Leon Hinde | Leave a Comment on Algo Update – Sell Signal Commonwealth Bank

Our Algo Engine flagged the negative technical structure in leading financials firms Commonwealth Bank and Goldman Sachs. These are both leading industry names which have bearish price action developing.

Investors should remain on the short side of these assets.

The charts below illustrate  the recent Algo Short signals along with the resistance or selling pressure, which is now building.

Chart – CBA
Chart – GS

Algo Short Signal – Bendigo Bank

Posted on | by Leon Hinde | Leave a Comment on Algo Short Signal – Bendigo Bank

Our Algo Engine is now flagging the “lower high” technical structure in Bendigo Bank.

The stock has seen a short squeeze following the recent earnings result and is now likely to find renewed selling pressure at $12.40.

Investors should remain on the short side of this trade with a stop loss on a break back-up through the $12.50 range.

Chart – BEN

We also have  a short signal in Bank of Queensland.

Chart – BOQ