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After posting a 2-year high at $1370 in early April, the price of Spot Gold has dropped over 6% and made an intra-day low of $1281 during Monday’s trade.
The yellow metal has now firmed into the $1295 area and looks set to trade back over $1300 over the near-term.
Our ALGO engine triggered a buy signal in OGC into yesterday’s ASX close at $3.32.
In addition to the recent slide in Spot Gold, shares of OGC have been pressured lower after its Q1 update showed that production and sales were both lower due to severely cold weather at its Haile Mine in the USA.
The daily charts show solid support in the $3.10 area and we see scope for a move back over $3.65 as the spot Gold price moves higher.
OceanaGold
Our ALGO engine triggered a buy signal on JHX into Monday’s ASX close at $22.45. The share price surged 4.5% to $23.50 yesterday and has pulled back into the $23.00 area in early trade today.
Tuesday’s sharp move higher was prompted by the release of their Q4 full-year results, which reflected a 12% increase in EBIT to USD397 million, as well as positive guidance for FY 2019.
We see scope for a move back into the April high levels just below $24.30 and suggest working a sell stop at or near the recent low of $22.20.
James Hardie goes ex-div $0.30 on the 6th of June. Adding a $24 Dec call option generates an additional $0.92 per share income.
James Hardie
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Shares of WFD have slipped to a 1-month low of $8.84 in front of this week’s shareholder vote on the Unibail-Rodamco takeover bid.
At this point, there’s no sign of dissenting investor groups, and the boards of both companies have already approved what will be the biggest M&A deal in Australia.
Because of a lower valuation in the shares of Unibail, the $10.01 cash and script offer has been re-priced lower over the last two weeks.
Still, even modest estimations put the real market value in the $9.15 to $9.25 area, about 5% higher than current prices.
WFD was added to our ASX Top-20 Model portfolio on February 7th at $8.90. We prefer the long side of the stock from these levels with an upside target of $9.45 to $9.50.
Westfields
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Shares of CSL are 1% higher at $185.00 in early trade as the company announced stronger profit guidance for FY 2018.
The updated guidance has been lifted from the previous USD 1.55 to 1.6 billion range to a USD 1.68 to 1.710 billion target.
Better than expected sales of several of their cornerstone pharmaceutical brands have supported this profit upgrade.
Despite trading near all-time highs, recent research notes have raised their medium-term price target to $190.00.
CSL is the best performing stock in our ASX Top 20 portfolio. It was first placed in the model on January 5th, 2015 at $90.00 and has gained over 105% since then.
CSL Limited
The S&P/ASX 200 Index finished the week down 0.47%.
The best performer was the Health Care sector, up 2.4% and the the worst performer was the Telecoms sector, down 10.1%.
Telstra Corporation down 11.6% and Vocus Group Ltd down 10.9%.
The XJO index is running into resistance at the prior high of 6150, (reached in January). With resources and the banking sector looking fully valued and the industrial sector trading on stretched price to earnings ratio, we see little upside potential for the index.
Investors should be looking at using a derivative overlay to enhance the income from their existing portfolios.
Our ALGO engine triggered a sell signal for Woodside Petroleum into yesterday’s close at $34.31.
This “lower high” formation corresponds to the $34.98 high posted on January 15th.
WPL announced a rights issue in early February to raise $2.5 billion for further acquisitions, including the Scarborough gas field in WA. This capital raising pushed the share price to a 10-month low of $28.60.
Since then, the stock price has mirrored the recent rally in global crude oil prices and has gained close to 20% as of yesterday’s close.
However, at current production rates, WPL only has between 12 to 15 years of oil reserves left in its portfolio.
As such, the $2.5 billion dollars it raised for acquisitions looks necessary and it’s likely that without continually spending to acquire additional reserves, the company will not be able to sustain its current level of output.
We see the first key level of support near $32.60 with a further downside target around $31.10.
Woodside Petroleum
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