Stay Long Treasury Wine Estates

Posted on | by Todd

It was just over a month ago that TWE shares were hammered from $20.00  down to $15.60 in just a matter of days.

The catalyst for the 20% drop was a report that TWE’s business model had caused a glut of lower grade wines in China and the local franchisees were not happy.

However, CEO Mike Clarke was quick to step in and stridently defend the company’s distribution structure and future earnings trajectory.

So far this year, earnings in Asia are up 48% to $117 million, 8% in North America to $100.4 million, 17% in Europe to $24 million, and 28% in Australia and New Zealand to $68.2 million.

Technically, the internal momentum indicators are pointing higher and we see the next key resistance point near the $17.50 level, before returning to the $20.00 handle over the medium-term.

Treasury Wine Estates

 

 

 

ALGO Buy Signal On ZGOL (Gold ETF)

Posted on | by Todd

Our ALGO engine triggered a buy signal on ZGOL (ETF) into Thursday’s ASX close at $16.50.

This “higher low” pattern is referenced to the low posted on December 18th at $16.18.

ZGOL is an Exchange Traded Fund based on Spot Gold prices denominated in Australian Dollars. As such, a period of rising Gold prices combined with a lower AUD/USD would be the optimum valuation environment.

More specifically, if the price of Gold rises to $1350 and the AUD/USD drops to .7400, we calculate the unit price to trade in the $18.25 area.

ZGOL is backed by physical Gold held by the ANZ Banking Group at its vault in Singapore and is traded on the ASX.

ZGOL Gold ETF

 

 

ALGO Sell Signal For Super Retail Group

Posted on | by Todd

Our ALGO engine triggered a sell signal on SUL into Friday’s ASX close at $8.78.

This “lower high” formation is referenced to the $9.12 high posted on January 18th.

Super Retail Group is the company behind the Rebel, Supercheap Auto and BCF brands.

The stock is not excessively expensive at 12X trailing earnings and a fully franked 5.2% dividend, but we see the potential for a technical correction which could drift back into the $8.00 range over the near term.

Super Retail Group

 

 

 

Keep OZL On Your Radar

Posted on | by Todd

Shares of OZL are flat in early trade as their $418 million takeover of Brazilian-based Avanco Resources is close to finalized.

The final vote from Avanco’s largest shareholders is expected to be accepted by June 14th. We consider this acquisition timely and a net positive for the Adelaide-based miner.

The share price of OZL has mirrored the 8% gain this week in the spot price of copper to reach a 6-year high of $10.68.

OZL has been part of our ASX top 100 portfolio for just over three years from $4.25.

We don’t currently have an ALGO buy signal for the stock, but will look for a “higher low” pattern on a pullback into the $10.00 area.

OZL

High Grade Copper

US Equities Build On “Higher Low” pattern

Posted on | by Leon Hinde

After falling 10% from the January highs, the leading US indices are again exhibiting strong technical momentum, largely supported by bullish earnings outlook and PE expansion for the large technology names.

In Saturday’s post, we looked at the “higher low” formation in the Dow Jones and the need to stay long the index whilst the low of 24,247 remains in place.

We now include an up trending support line and re-affirm  the long side positioning, with a trailing stop loss below the up trending support.

Dow Jones

 

 

 

ALGO Update: Stay Short ANZ

Posted on | by Todd

Shares of ANZ will likely remain under pressure as the ACCC has broadened the charges related to the bank’s 2015 capital raising.

In addition to two other ANZ staff, executives from Citigroup and Deutsche Bank have also been charged with criminal cartel offences.

Our ALGO engine triggered a sell signal on ANZ at $28.15 on May 11th.

We see chart resistance near $26.95 and the next downside support area at $25.80.

ANZ