The current sell-off in TCL will soon offer a reasonable entry level.
With US yields remaining under pressure, we continue to like yield sensitive names. Especially, if we can pick them up at a discount following investors taking profit from the recent strong rally.
The chart below shows the value range to enter TCL.
The US stock Volatility Index, or VIX, is the industry benchmark for measuring the implied volatility for stocks in the S&P 500 index. It’s often referred to as the “fear index.”
The VIX is a non-directional indicator, since market volatility will increase whether the S&P Index trades higher or lower.
A low number suggests low volatility, and a low level of “fear” that the collective stocks in the S&P 500 are going to stage a sharp move in either direction.
As of Friday’s NY close, the VIX has settled below 11.00 for 15 consecutive trading sessions. This is the longest streak of market complacency since the VIX started trading in 2004.
VIX Index
Since the US election in November, the 5 biggest stocks on the NASDAQ: Amazon, Apple, Facebook, Google and Microsoft have gained an extraordinary $675 billion in market capitalization.
This move higher pushes their collective valuations to close to $3 trillion, or over 10% of the entire US market.
To put this into a global context, that’s more than the total value of stocks in any single equity market worldwide except the UK, China, Japan, Hong Kong and the USA.
ING is on the fringe of the stocks that we tend to focus on, however, given the recent Algo Buy signal at $3.05, we’ve now added this to our watch list.
Our Algo Engine is flagging the lower high structure in FLT.
Our Algo Engine generated a buy signal on GrainCorp back in early March.
Following the strong share price move the stock now looks fully valued short term.
GNC delivered a solid 1H result and the full year forecast of around $160m should be achievable. Based on DPS of $0.32 the stock trades on 3.2% yield.
GDX is creating a higher low formation and we see further upside. Stop loss should be placed at $28.00
Since posting an intra-day low at $22.50 on May 5th, shares of BHP have lifted over $1.00 to $23.85.
Against a back drop of weakening fundamentals in the Iron Ore and Coal markets, we see this corrective move higher running into resistance in the $24.00 area.
General market downside risk is also adding to our interest in placing orders to exit long positions in BHP at $24.00 going into the weekend.
The ALGO engine triggered a sell signal on Brambles at yesterday’s close near 10.50.
We don’t see a tremendous amount of downside in the stock with good price support in the $9.60 area.
Internal momentum indicators on the daily charts confirm the ALGO signal and a near-term overbought condition.
We have been suggesting that clients holding long positions take profits or write covered calls in the $11.00 strike price.
We continue to track the Betashares oil ETF OOO.AXW
Oil prices have rallied from the recent low after this week’s largest inventory drop of 2017. EIA data has revealed U.S. crude stocks fell by 5.2M barrels. In addition, OPEC supply cuts have been agreed to by Iraq and Algeria joined Saudi Arabia.
Concerns regarding the abundant added supply of US shale oil will keep a lid on any meaningful rally, but we may see a bounce from the recent low. Investors should run stop losses under the trend low on both ETF and individual stock names.
Our best performing energy trade has been the long ORG position. However, due to the extended price rally since the Algo Engine buy signal, we’re now inclined to take profit in ORG and consider the OOO.AXW ETF as a replacement.
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