Will Domino’s Deliver In 2018?

Posted on | by Todd | Leave a Comment on Will Domino’s Deliver In 2018?

Shares of Domino’s Pizza are up over 2% at $45.60 as a research report from Morgan Stanley forecasts the stock rising to $53.00 over the next 12 months.

The report suggests the recent fair-wage claims and complains from franchisees have been overstated in the sell off in the share price.

The report also points out that DMP is the third most shorted stock on the ASX, with 16.5% of the company in the hands of short sellers.

From a technical perspective we see a key price hurdle in the $50.00 area, which is the bottom of the price gap lower on August 11th.

Short-term traders looking to buy DMP should place a stop around the $44.80 level.

Domino’s Pizza

 

Negative Divergence In The XJO Index

Posted on | by Todd | Leave a Comment on Negative Divergence In The XJO Index

The last time our ALGO engine gave a signal in the XJO Index was on September 8th, 2016; this was a buy signal at 5227.

It isn’t surprising that there hasn’t been a more current signal considering that the index has traded in a wide, sideways trading range between 5650 and 5960 during 2017.

However, the recent break above 5960 has the technical structure of a “price exhaustion pattern” and could signal a correction lower into the new year.

Looking at the internal momentum indicators on the daily chart, the November high of 6052 had a corresponding RSI reading of 80.00.

Interestingly, the higher print from December 20th at 6083, had a lower RSI reading of 63.00.

This divergence in momentum suggests the index is nearing a medium-term high and could offer a shorting opportunity. The next key support level is the November 16th low at 5916.

The XJO Index is available to trade on our SAXO Go platform as both a CFD and a futures contract.

XJO Index

 

AUD Boosted By Last Week’s M&A Activity

Posted on | by Todd | Leave a Comment on AUD Boosted By Last Week’s M&A Activity

Last week’s Merger and Acquisition activity was a key driver in the Aussie dollar’s move from .7510 to .7690.

Tuesday’s Westfield deal for AUD 32 billion combined with Zurich’s announcement that it will buy ANZ’s life insurance business for AUD 2.85 gave the local currency a bid tone for the week.

All together, the flow was about $9 billion of AUD/USD that needed to be bought to cover the hedging aspect of the M&A transactions. This was enough to push the AUD/USD to .7690 before offers capped the move.

With this buying support absorbed into the market, the technical picture in the AUD/USD looks to be weakening with the longer-term down trend the path of least resistance.

We see the next area of support in the .7565 area. A break of the December 11th low at .7510 could trigger a quick move back to the .7300 handle.

Some of the ASX stocks that would benefit from a lower AUD include: RHC, NCM, QAN and TWE.

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