Transurban is under Algo Engine sell conditions and we’ve remained cautious on valuation grounds and the likely reduced dividend payout.

TCL’s earnings were below consensus and risks exist on breached covenants in the US, along with ongoing COVID-19 volume impacts.

Target $12.50

Transurban Group – Algo Buy Signal

Transurban is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

We see upside in TCL to $16, at which time investors should consider selling out-of-the-money call options to enhance the income return.

For more information on the derivative strategy, please call our office on 1300 614 002.





XJO – The 5941 Level Is Technical Resistance

The XJO has formed a “lower high” pattern within the existing Algo Engine buy signal structure.

The market has rallied 6% from the recent buy signal but we’re now mindful of the recent break of the “higher low” structure, as circled on the chart below.

5941 is resistance for the XJO and whilst the market remains below this level, some caution is required.

Names that remain supported within today’s broad market sell off include, AGL, CTX, GPT, WES, SCG, TCL, HSO & WOW. We remain cautious on the banks and select resource names .


Amcor & Transurban – AGM May Shift The Share Price

Both AMC and TCL have been under recent selling pressure as bond yields in the US have moved higher.

The defensive nature of both businesses has seen their share price trade as a proxy to bonds.

With TCL and AMC both scheduled to have their AGM tomorrow, we believe there could be a rally in the share price as investors gain more clarity on future earnings growth.

We’re mindful that Algo Engine sell signals are displayed, however we’re willing to commit to Amcor as our preferred opportunity, of the two names.




Keep Transurban On Your Radar

Shares of TCL have dropped about 10% over the last month since announcing a $4.8 billion capital raising related to the WestConnex project.

The share price suggested has been $10.80, which is just 10 cents below last Thursday’s intra-day low.

From a broader perspective, we believe the 25.5% ownership of the WestConnex project will underscore TCL’s status as Australia’s dominate toll road operator, support future cash flow and secure their dividend growth.

We don’t currently have an ALGO buy signal for TCL, but would not be surprised to see one soon.

Our medium-term target for TCL is in the $13.00 area.



TCL Firms After Favorable ACCC Ruling

Shares of Transurban have been holding above the $12.00 mark since the ACCC approved the company’s bid on Sydney’s WestConnex tollway. Shares are currently in a trading halt.

The green light from the regulator clears the way for TCL to acquire other domestic assets to build on its future growth in earnings.

TCL currently own 15 of the 19 toll roads in Australia. This gives TCL an advantage over other bidders since many tollways feed into other strategic motorways.

The company plans to do a capital raising for $4.8 billion to fund the acquisition. $4.2 billion of this will be in the form of offering  shares at $10.80.

We don’t have a current ALGO buy signal on TCL and would look for lower levels to enter long.

Transurban Group

ALGO Sell Signal On GPT……3 Yield Names Go Ex-Div On Thursday

Our ALGO engine triggered a sell signal on GPT on June 21st at $5.36.

This “lower high” pattern is referenced to the high of $5.49 posted earlier this year on January 5th.

It’s worth noting that two other yield sensitive names, TCL and SYD also triggered ALGO sell signals last week. Furthermore, all three of these stocks will go ex-dividend on Thursday, June 28th.

As illustrated in the charts below, all three of these stocks have been in an uptrend since March.  We expect this pull back into their dividend should allow for better entry points for medium-term investors.

We see initial support for GPT at $4.70, with a stronger chart point at $4.50.



Sydney Airport

Enhance Cash Flow On TCL And SYD

Our ALGO engine triggered a sell signal on both SYD and TCL into yesterday’s ASX close at $7.47 and $12.20, respectfully.

We suggest either taking profits on the stock or using the option strategy  outlined below.

With both of these names going ex-dividend on June 28th, we suggest selling a call option above the market to increase cash flow and enhance the return.

For TCL, we are looking to sell the October $12.50 call for around 24 cents and collect the 28 cent dividend.

For SYD, we will sell the October $7.75 call for around 12 cents, which will keep investors in the stock to collect the 18.5 cent dividend.


Sydney Airport