Banks Sell-Off – Where’s Support

Posted on | by Leon Hinde | Leave a Comment on Banks Sell-Off – Where’s Support

We’ve been net sellers of the banks and we continue to remain cautious. The probability of discounted rights issues, increasing bad debts, reduction of dividends and little or no revenue growth, hardly makes for a  compelling investment case.

However, the chance of the washout being completed in one continued move lower, is low. Normally, we’d expect to see value investors step in at some point and create a more structured decline, with reasonable rallies within the broader downtrend.

With the above in mind, I’ve looked at the MVB Bank ETF and based on a 50% retracement, we’re now within 5% of the likely support area. Any bounce will be moderate and investors should again look to sell the rally.

Our Algo Engine will continue tracking the entry signals.

Chart – MVB

 

 

Wesfarmers – Yield Support

Posted on | by Leon Hinde | Leave a Comment on Wesfarmers – Yield Support

Wesfarmers will be providing a strategy briefing day on the 7th of June, it’s possible commentary from the presentation will add buy-side support to the stock price.

Our FY18 forecast revenue is $72b, EBIT $4.8b, EPS $2.82 & DPS $2.44, placing the stock on a forward yield of 5.7%.

Over the past 3 years any pullback in the share price to the $40- $42 range has provided a good entry level. Resistance or selling has occurred at or near $45.

Chart – WES

 

 

 

Solid Gains For Gold

Posted on | by Todd | Leave a Comment on Solid Gains For Gold

After posting a low on May 9th at $1215.00, Gold touched a high $1270.00 in late NY trade on Friday. Internal momentum indicators are looking constructive for a move back to the April high of $1295.00

For investors looking to profit from a higher gold price, we suggest buying shares of NCM, EVN, or the BetaShare Gold ETF with the symbol: QUA. 

We have a medium-term target for NCM at $25.50, $3.00 for EVN and $14.00 for QUA.  Newcrest Mining

Evolution Mining

 

BetaShare Gold ETF

ETF Watch – Asian Markets

Posted on | by Leon Hinde | Leave a Comment on ETF Watch – Asian Markets

The ETF’s covered in this post are all ASX listed products, provided  by iShares.

IAA covers the top 50 stocks in Asia. Our Algo Engine triggered a buy signal in November 2016 when the ETF was trading at $62, it is now trading $76

Chart – IAA

The chart below is the IHK – Hong Kong ETF

Chart – IHK

The Chart below is the IZZ – China Large Cap ETF

Chart – IZZ

ETF Watch – IVV ETF (S&P500)

Posted on | by Leon Hinde | Leave a Comment on ETF Watch – IVV ETF (S&P500)

The IVV ETF is based on the S&P500 index in the US, the chart shows the market remains in a bullish higher low structure.

Investors continue to chase equity valuations higher as US GDP deteriorates.

Chart – IVV

The chart below is the BetaShares NASDAQ 100 ETF. Our Algo Engine triggered a buy signal in early 2016 when the ETF was trading at $10, it is now trading $13.50.

 

Aristocrat – 1H17 Earnings

Posted on | by Leon Hinde | Leave a Comment on Aristocrat – 1H17 Earnings

Aristocrat Leisure released 1H17 results with revenue and net profit beating analysts’ bullish expectations. Full year guidance was reiterated with profit growth likely to be + 20-30%.

North America and Digital underpin a strong earnings outlook and the company’s strong balance sheet, will likely see excess capital returned to shareholders and/or new acquisitions announced.

The company declared a dividend of $0.14 for the half-year, which was up from $0.10 in 1H16.

FY18 revenue is likely to increase 10%+ to $2.7b, EBIT $900m on EPS of $0.90, DPS of $0.36, placing the stock on a forward yield of 1.8%.

Our Algo Engine last generated a buy signal in October 2016 at $15.00

Chart – ALL

 

 

 

Big Week Ahead For The Aussie Dollar

Posted on | by Todd | Leave a Comment on Big Week Ahead For The Aussie Dollar

The AUD/USD ended the week with a softer tone at .7450, as S&P lowered the credit scores of 23 Australian financial institutions and Moody’s downgraded China’s sovereign credit rating.

This week’s retail sales and manufacturing data will have an impact on the next move in the Aussie.

Investors looking to profit from a lower AUD/USD can buy the BetaShare inverse ETF with the symbol: YANK.

The current price of YANK is $15.08. When the AUD/USD fell to .7330 on May 9th, the price was $15.55.

We estimate that when the AUD/USD trades down to the January low of .7160, the unit price for YANK will be approximately $16.50.

BetaShare YANK ETF