The S&P/ASX 200 Index finished the week up 0.88%.
The best performing sector was the Materials sector, up 3.0% and the worst worst performer was the Telecoms sector, down 1.0%.
The XJO looks over-extended and ready for a pullback.
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Shares of TAH and SGR have both firmed in early trade as several broker notes have upgraded the forward price targets of the shares.
The common theme of the research is the suggestion that investor’s negative sentiment has been overstated and that upcoming growth and profit numbers will support higher multiples.
Our ALGO engine triggered buy signals on both of these names in early April at $4.22 and $5.11 respectfully.
Internal momentum indicators are improving on both stocks and we see the next area of resistance at $5.20 for TAH, and $5.90 for SGR.
With less than 2-weeks until shareholders vote on the $27 billion takeover by Unibail-Rodamco, WFD shares are trading at $9.15, 85 cents below the $10.00 per share offer.
We haven’t heard any indication that shareholders will reject the offer and see scope for a quick, short-term rally into the $9.75 area before the vote at the AGM on May 24th.
As such, we suggest investors can buy WFD shares in their cash accounts, as well as on the Saxo Go CFD platform.
Westfields
Link Administration has been sold off following the Federal Budget measures aimed at increasing consolidation of inactive super accounts.
Although the announcement now creates a headwind for Link from FY20, we consider the stock “oversold”.
We suggest investors can accumulate Link at or near $7.00 support.
Link
The AUD/USD posted an intra-day high of .7810 on April 19th. Since then the Aussie has dropped over 5% and reached an 11-month low of .7410 during the NY session overnight.
And while the longer-term technical outlook remains negative, the current price action suggests that we could see a modest upside correction over the next week.
During this same period of time, the price of AUD EFT with the symbol YANK has traded from $13.10 to $14.55.
We suggest investors holding YANK should take profits at or near $14.40 and look to re-enter in the $13.90 area.
Yank
Our Algo Engine triggered a recent series of short signals in IRE.
In a strong market, Iress may trade as high as $11.50, however, we feel the stock is overvalued and likely to soon resume the downtrend.
The initial downside target is currently near $10.00.
CBA provided a 3Q18 trading update and the result was soft and reflected declining bad debt charges are no longer offsetting softer revenues and higher operating expenses.
Historically, CBA traded on an average 11% premium to the other banks and we’re now seeing that narrow down to 4%.
CBA
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WBC’s 1H18 NPAT of $4.25bn was a strong result and beat most analysts expectations.
Margin expansion and strong contributions from markets & treasury income, showed positive trends and helped to deliver total earnings growth of 4%; outperforming both ANZ and NAB.
We highlight the trend across all bank results where bad debt charges are lower than expected. Provisioning is at historical low levels and there is some early stage evidence of trends within 90+ BDD rising.
Investors should use any recovery from current levels in the banks to sell covered call options or to re-balance overweight holdings.
WBC
Level 29 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453
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