Wesfarmers Weaker After Q1 Report

Posted on | by Todd | Leave a Comment on Wesfarmers Weaker After Q1 Report

In their quarterly report released today, Wesfarmers announced that sales growth in their food and liquor area continues to disappoint.

The owner of Coles reported that food and liquor sales grew by only 0.4% in Q1 2018, which is down from last year’s 1.8% gain. In addition, lower fuel sales has also slowed convenience store sales growth.

On a brighter note, the report showed continued strong performance from its Bunnings, Kmart and Officeworks chains.

Bunnings total sales growth was 11.7%, Kmart lifted 4.9% and sales at Officeworks rose by 7.8%

Shares of WES are down over 2% to 41.80 in early trade. We see the next key support level in the low $40.00 range.

Wesfarmers

 

Sector Update: Gaming Stocks

Posted on | by Todd | Leave a Comment on Sector Update: Gaming Stocks

Australian Gaming stocks look set to move higher on increased seasonal interest and improved market conditions.

The three names we prefer in the gaming sector are: TAH, SGR and CWN.

Our ALGO engine triggered a buy signal in CWN on September 28th at $11.10. The company has gotten some bad press relating to machine tampering, but has rebounded as the accusations are being dismissed as “political fanfare.”

Our medium-term target on CWN is $12.75.

Shares of TAH have been firming off the $4.00 support area as the long-awaited merger with TTS enters the home stretch.

It’s widely believed that the government would like to consolidate corporate bookmaking and this merger would achieve that goal.

Our medium-term target for TAH is $5.25.

SGR is more of a technical play. After breaking out of a “triple top” pattern at $5.30 yesterday, the share price now has a upside measured target of $6.00.

Crown

TabCorp

Star Entertainment

 

Building Stocks Approach Key Resistence Levels

Posted on | by Todd | Leave a Comment on Building Stocks Approach Key Resistence Levels

Reports about the health of the Aussie housing market vary depending on who is writing them; the RBA is suggesting the market is softening as household debt increases, while real estate agents look to foreign buyers to support higher prices.

Within this mix we have seen building stocks rally hard and are now beginning to look overbought.

Of the three major companies, CSR, JHX and BLD, our ALGO engine has triggered a sell signal on both CSR and JHX.

The internal momentum indicators on all three of these names are in extreme valuation ranges and and near their 52-week highs.

We believe it’s reasonable to expect a pullback from current levels and look for downside targets of $17.75 in JHX, $4.30 in CSR and $6.50 in BLD.

 James Hardie

CSR

 

Boral

ALGO SIGNAL: Sell James Hardie

Posted on | by Todd | Leave a Comment on ALGO SIGNAL: Sell James Hardie

On August 8th, our ALGO engine triggered a buy signal on JHX at $17.90.

At the ASX close last Thursday, the ALGO engine gave us a sell signal at $18.83.

Looking at the daily chart, the price action fits the “lower high” pattern based on the July 27th intra-day high of $19. 80. In addition, internal momentum indicators have now crossed into overbought territory.

Investors who took the August buy signal on JHX should look to exit the stock around the current $19.00 level.

 James Hardie