XJO – Chart Update
ALGO Signal Update: Take Profits In ANZ
The ALGO engine gave a buy signal for ANZ on February 7th at $28.80. During yesterday’s session, the stock traded up to $32.85; within 20 cents of the $33.03 high posted on August 4th, 2015.
Looking back at that price action, after ANZ traded over $33.00 in August of 2015, the share price fell to $26.40 during the next three weeks.
That type of sell off is not our based case. However, with almost a $4.00 profit since the ALGO buy signal at $28.80, investors may want to consider taking profits or write covered calls on ANZ above $33.25.
The ALGO engine has given many profitable signals in the market, in general, and in the banking sector, specifically. We will look for the next buy signal to enter ANZ on the long side again.
Based on internal momentum indicators, $30.00 is the initial level of price support.
ANZ
Algo Engine – Open Buy Signals
Below is a list of the current ASX top 50 stocks that have open buy signals from our ALGO engine.
Some of these trends are maturing and are in the latter stages of their price expansion. However, taking the time to look through the charts and overlaying the ALGO Engine signals will be a worthwhile exercise.
TWE, WES, WOW, ALL, ANZ, ASX, AZJ, BHP, CSL, DXS, FMG
GMG, IAG, JHX, MQG, NAB, ORG, ORI, RIO,S32, SCG, SGP & SHL.
If your access to the charts and signals has expired, please contact me leon@investorsignals.com
Algo Engine – Preliminary Research
We have contracted a third-party firm to conduct a study on the ALGO Engine signals and trading model performance.
The preliminary results have supported my assumptions made by following 18 years of practical experience in the markets. The methodologies developed are now being integrated into a model using the following technical principles.
Our Algo Engine is capturing higher low buy points in individual stocks which make up the ASX top 50 index. When the XJO itself is making “higher highs” and “higher lows”, this produces a very high success rate.
Buying into these patterns can keep investors exposed to major bullish momentum without the human emotion of prematurely taking profits on the trade, and importantly, automating the stop-loss when the upward price momentum begins to reverse.
The chart below shows the performance of the “long only” ALGO Engine signals. The model is based on buying $50k in all long signals and holding the long position until a subsequent short or sell signal is triggered.
An example of this logic is also displayed on the individual stock sample below using Amcor.
For a comprehensive copy of our preliminary research paper, please contact me on leon@investorsignals.com
Take Profits In Suncorp
The ALGO engine gave us a buy signal on Suncorp on January 23rd at $12.92. Yesterday, the ALGO engine generated a sell signal at $13.77.
We suggest that investors who took advantage of the buy signal use this recent price increase to take profits or write covered calls above $14.00.
Technically, the $14.00 level has proved stiff resistance dating back to January of 2015.
Furthermore, the ALGO engine has generated exceptional signals for capturing the medium-term trading ranges for Suncorp.
Suncorp
XJO – Chart Update
The XJO made a low on the 19th of April at 5790 and has since rallied to within 40 points of the trend high that began in Feb 2016.
Healthcare – RMD, SHL, CSL & RHC
We hold CSL, RMD, RHC & SHL in our model portfolio. Over the next 10 years these remain a “buy on the dip” story and the Algo Engine will alert us to the next higher low formation for a discounted entry point into the stocks.
RMD reports tonight in US and we’re looking 15% EPS growth.
AUD Slips Lower After Neutral CPI Data
Inflation in Australia remains flat, and below the lower end of the 2% to 3% RBA target band.
Many analysts were expecting an uptick in the CPI inflation reading to 2.3%, which could prompt the RBA to shift its neutral-bias to a tighter posture.
As a result, the AUD/USD fell to a 3-month low of .7455 overnight. With the RBA meeting next week, any mention of a more benign inflation outlook would put more downside pressure on the Aussie.
Internal price indicators now point the the next support level at .7420 and a more significant target of .7365 over the near-term.
Over the last few weeks, we have been suggesting that investors look to buy the BetaShares YANK ETF to profit from a falling AUD/USD.
The YANK is an inverse ETF, with a 2.5% weighting. This means that YANK will gain 2.5% for every 1% drop in the AUD/USD.
IBM -Where is Support
IBM has approximately US$3.8 billion remaining on its current share buy-back plan. Over the last two years, the company has averaged about $4 billion per year in share repurchases .
IBM annual yield is now running at around 3.70% or equivalent to US$6.00, that’s well above US Treasuries.
Our Algo Engine generated a buy signal at around $155 back in September last year. Since then, the stock rallied to $183 before last week’s disappointing earnings result caused the stock to sell-off. The price structure looks like we may see a retest of the $150 support level in the near -term.
Oil Search Points Lower On Weaker Crude Prices
After falling over 7% last week, WTI Crude Oil dropped another 1% last night to trade at a four-week low of $49.05.
Concerns of oversupply in both Crude and Gasoline are dragging prices down as both products are now trading below their 30 and 50-day moving averages.
This weakness in both the technical and fundamental indicators will likely put downside pressure on the shares of Oil Search.
On April 19th, Oil Search announced a quarterly report which showed a 2% decline in total production for the March quarter, along with a 1% decline in total sales revenue.
Based on these data sets, we would expect OSH shares to trade back down to the initial support at $6.70 in the near term.
Oil Search
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