ETF Watch – Gold Miners
The Vaneck Vectors Gold Miners ETF is building a higher low structure and we have an upside price target of $35 with a stop-loss below $29.40
BHP Gets A Boost
Yesterday’s 5% rally in BHP left a many investors wondering what was driving the shares on a quiet Monday session.
The main reason was a report that Elliott Advisors suggested the company could unlock shareholder value by spinning off US Petroleum and collapse of the LTD and PLC shareholdings.
The idea is that the Elliott plan would accelerate the release of value and franking credits. Of course, the $6.00 rally in Crude Oil since March 27th has also been a boost to BHP shares.
Our ALGO engine generated a buy signal for BHP on March 13th at $23.65.
We remain cautious of the extended valuation of equities, in general, and suggest placing a stop in the $24.40 level on long positions.
Chart BHP
ETF Watch – Crude Oil Index
The Betashare Crude Oil Index has now rallied 10% from the recent low. At an individual stock level, our preferred energy plays remain WPL, OSH & ORG.
Chart Update – BHP & ORG
Our Algo Engine triggered buy signals in BHP and ORG. The share price has since rallied in both examples and we lift the stop-loss to the entry price to ensure we protect the long exposure ahead of an expected pick-up in market volatility across the coming months.
Ramsay Healthcare Update
When we last updated Ramsay Health Care (RHC) on March 7th, we pointed out that the strong earnings potential and solid dividend growth were reasons for holding the stock.
Since then, RHC has moved just over 5% higher and has a bullish technical structure.
The current price is comfortably above the 30-day moving average at $67.75 and we have a medium-term target of $73.00.
Ramsey Healthcare
ETF Watch – ASX50 & Resources
Two ETF’s that we’re now including in our portfolio construction include.
SFY.AXW SPDR S&P50 Fund & the QRE.AXW Betashares S&PASX200 Resources ETF
Dow Jones – Chart Watch
The Dow Jones is holding above the 20,412 low. A break below will be negative for US equities.
US Q1 17 earnings kick-off next week. Citigroup will be of particular interest when it reports on Thursday.
XJO – Chart Update
The XJO continues to make higher low formations with 5830 providing buying support throughout the past week. If we see price action break below 5830 and then form resistance, we’ll view this as the beginning of structural weakness for the local market.
Gold & Oil – Outperforming
With market volatility picking up as geopolitical risk rises, gold and oil are somewhat of a safe harbour.
In both cases, investors can look at ASX listed ETF’s to capture broad- based exposure, or look at the leading individual company names.
Resources – Stop-Loss Required
Although many resource names have enjoyed a strong rally over the past 12 months, there’s reason to be cautious.
To protect capital we recommend investors holding resource names, run tight stop-losses below the recent lows.
Overall, investors should be reviewing their portfolio allocations, tilting to defensive names and ensuring access to effective portfolio hedging and shorting strategies are in place.
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