BHP And RIO Trade Lower As Iron Ore Continues To Unravel

Posted on | by Todd | Leave a Comment on BHP And RIO Trade Lower As Iron Ore Continues To Unravel

The Spot Iron Ore price continued to trade lower overnight, losing 4.6% to reach a 6-month low of $63.20 per dry tonne. This is a 33.5% drop from the high of $95.00 last traded on February 21st.

It’s worth noting that the sharp selloff is picking up pace just weeks away from the delivery of the Australian Federal Budget.

Since Iron Ore remains the country’s single biggest export, Federal revenue projections are highly sensitive to the outlook for Iron Ore prices.

Both RIO and BHP have traded lower on the open,  reaching new 5-month lows of $57.60 and $23.30, respectively.

Unless Iron Ore stages a dramatic rebound, we look for the the next key support level in RIO at $56.20, and at $22.60 for BHP. 


 

Goldman Sachs – Q1 17 Earnings Result

Posted on | by Leon Hinde | Leave a Comment on Goldman Sachs – Q1 17 Earnings Result

Goldman shares dropped more than 5 percent overnight to trade at their lowest since the end of November and are down 10 percent for the year so far. The US financials sector is about 1 percent lower year to date

Goldman Sachs reported 1Q earnings per share of $5.15 a share, missing a consensus estimate by 16 cents. Revenue came in short by about $420 million at $8.026 billion.

The last time Goldman reported a miss on earnings per share was the fourth quarter of 2015.

Technical buying support may start to build at or near $200.

Chart – Goldman Sachs

 

 

CBA Nears Key Resistance

Posted on | by Todd | 1 Comment on CBA Nears Key Resistance

Australian banks are currently trading at lofty levels and close to significant chart resistance points.

We consider CBA to be most vulnerable to a down side correction considering the technical pattern and the premium at which it trades to its peers.

Going back to December 2015, there have been four occasions when CBA shares traded into the $85.00  to $86.00 price range before rolling over for a 5 to 10% correction. At this point, we are looking for a technical move back to the $80.00 level.

Fundamentally, huge consumer debt burdens, stagnant domestic wages growth and an overheated housing market will likely act as a headwind to further meaningful price appreciation.

Investors holding long CBA positions can look to sell covered calls into June, or buy the May $83.00 outright put option.