The Australian-listed Star yesterday informed its investors that Ellerston Capital (25% owned by James Packer) now has a 5.07% stake.
Institutional investor, Perpetual, which is already Star’s biggest shareholder, also increased their holding when Malaysian casino giant Genting sold down its stake.
Star & Tabcorp have “lower high” formations, where as Crown is displaying a bullish, “higher low” formation.
Amcor is trading on a high multiple of 19x forward earnings and a 3.8% dividend yield. However, the earnings are relatively defensive and we’re expecting 8% underlying EPS growth.
The stock should find support at or near $16 and is an appropriate consideration as a buy-write for client portfolios.
We’ve been highlighting the buying opportunities in WOW, ORG, IPL, GPT, TCL & SYD over the last few weeks.
We continue to like these names and see supportive technical and fundamental factors, which we believe will create investor value.
Our Algo Engine recently triggered a buy signal in a number of ASX listed REIT’s as well as the SPDR Property Fund ETF.
Looking at the buying interest in US REITs across the last few trading sessions, we anticipate similar support for the sector on our local market.
The AUD/USD traded higher everyday last week as the currency traded to a 15-month high versus the USD at .7833.
General weakness in the USD combined with stronger Chinese import data gave the AUD/USD the momentum to break above the .7825 level last traded in April last year.
It’s worth noting that over the last 15 months, the AUD/USD has traded over .7750 four times. On each of these occasions, within a month, the AUD/USD had dropped by 4%, or more.
More precisely, after trading up to .7825 on April 21st, 2016, the AUD/USD lost over 8.5% to trade at .7150 on May 24th.
With both the RBA minutes and the monthly employment data set for release this week, we could hear some comments from the RBA regarding the impact of a higher currency on Aussie exports and the economy.
Investors looking to profit from a lower AUD/USD can look to buy the BetaShare ETF with the symbol: YANK.
YANK is an inverse ETF, which means the unit price increases as thew AUD/USD trades lower.
YANK has a 2.5% weighting, which means a 1% move in the AUD/USD translates to a 2.5% move in the unit price. The unit price is currently $13.50, we calculate that when the AUD/USD falls back to .7300, the unit price of YANK will be over $16.00.
BetaShare ETF: YANK
AUD/USD Spot price.
Our Algo Engine is flagging the “higher low” formation in OGC and it appears the stock is now trading in an oversold range.
Watch the short-term momentum indicators for a positive reversal and then apply a stop-loss below the final pivot point.
Our Algo Engine has triggered a buy signal in GNC. The price action has now retraced back to $9.00 and filled the price gap from mid-May.
The S&P/ASX 200 Index finished the week up 1.08%.
The best performer was the Energy sector, up 2.7% & the worst performer was the Health Care sector, down 1.1%.
The XJO continues to trade below the recent 5850 “lower high” formation.
As both the Dow Jones 30 and the S&P 500 rose to new all-time highs this week, daily trading volume was 20% lower than the 3-month average and “short interest” in stocks fell to the 2007 lows.
Short interest is defined as the total Dollar value of stocks which investors have “sold short”, which they don’t own, with the idea of making a profit after buying them back at a lower price.
The combination of seeing the Dow and SP 500 rise to new highs on lower volume, and contracting short interest, is an illustration of a technical “short covering” rally.
Seeing index prices at new highs on lower volume suggests that “new money” is not coming into the market and that stock prices will revert lower after “short sellers” have taken their losses.
This technical combination doesn’t always trigger an immediate sell off in stocks. However, the market condition of “higher highs on lower volume” is often cited after a material correction in the market occurs.
As US earnings season goes into full swing next week, we’ll continue to watch the price/volume correlation and the potential impact on the market.
Over the last two weeks, yield sensitive names like SYD, TCL and GPT have all dropped over 10% from recent highs.
One of the main drivers has been the change in interest rate expectations from G-7 central bankers and the subsequent rise in short-term paper.
Moving forward, we see more likelihood of G-7 rates reverting lower within the year’s range and providing upside potential in the stocks above.
Other stocks we like on the basis of lower local rates are: AMC, WOW and MPL.
We see reasonable upside potential in the names and will employ the derivative overlay strategy (selling covered calls) to enhance the portfolios returns.
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