ETF Update: Aussie Dollar Slips On US Rate-Hike Prospects

Posted on | by Todd | Leave a Comment on ETF Update: Aussie Dollar Slips On US Rate-Hike Prospects

The Aussie Dollar fell to a 1-month low against the USD at .7850 as comments from FED chief Janet Yellen increased the odds of a December rate hike to over 70%.

As the interest rate premium between the US and Australia continues to narrow, the AUD/USD will likely trade with increased downward pressure.

At this stage, the spread between the US and Australian 10-year yields has dropped to 50 basis points, the most narrow in over 5 years.

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

YANK is an inverse ETF, which means the price of YANK increases as the AUD/USD trades lower. It also has a weighting of 2.5%, which means the unit price will fluctuate  by 2.5% for every 1% change in the AUD/USD exchange rate.

With a current price of $12.90, we calculate that the price of YANK will be near $16.50 as the AUD/USD returns to the January low of .7160.

BetaShare ETF: YANK

 

 

 

 

 

Trade Update: Buy/Write Strategy For AMCOR

Posted on | by Todd | Leave a Comment on Trade Update: Buy/Write Strategy For AMCOR

On September 7th, AMC announced that they were in early takeover negotiations with US packaging firm Bemis Company.

The estimated value of the acquisition is in the AUD $5 billion range, which is not a quite 1/3 of AMC’s market capitialization of AUD $18 billion.

Shares of AMC have traded about 3% lower since the announcement and reached a 2-month low of $15.20 last Friday.

We believe the internal momentum indicators are approaching an oversold condition, and consider current prices a reasonable level for a buy/write strategy.

Amcor

 

 

 

 

Look To Buy TWE Below Current Levels

Posted on | by Todd | Leave a Comment on Look To Buy TWE Below Current Levels

Shares of TWE have dropped about 6% since posting an all-time high of $14.64 on September 11th.

There’s no question that TWE is one of the most solid performers on the ASX  and we have bought and sold it successfully for client accounts several times this year.

With the company making an accelerated push into the US premium wine market, we feel this pullback will offer another good buying opportunity in the near-term.

In addition, TWE is only $100 million into their $300 million stock buyback scheme, which should also offer price support at lower levels.

We see scope for a move back to $13.10 and will update when an ALGO buy signal is triggered.

Treasury Wine Estates

 

ALGO Update: BTT Has Hit Resistance at $11.35

Posted on | by Todd | Leave a Comment on ALGO Update: BTT Has Hit Resistance at $11.35

Our ALGO engine triggered a buy signal in BTT on September 8th at $10.15.

The share price reached a high of $11.35 last Friday but is now looking technically stretched.

We suggest exiting long positions at current levels or raising stop-loss orders to $10.88.

A more significant support level can be found at $10.10, which may attract fresh buying interest.

BT Investments

 

 

TRADE UPDATE: Exit Longs In SUNCORP

Posted on | by Todd | Leave a Comment on TRADE UPDATE: Exit Longs In SUNCORP

On September 18th, The ALGO engine signalled a “higher low” structure in shares of Suncorp at $12.60.

Two days later the company paid a 40 cent special dividend and pledged to boost dividends throughout 2018, which lifted the share price.

Despite posting a high of $13.10 on Monday, the upside technical momentum looks to be running out of steam.

As such, we would suggest taking profits at current levels or raising stops to break-even. The chart below illustrates that the next key support level is near the $12.40 area.

Suncorp