ALGO Buy Signal For Sydney Airport

Posted on | by Todd

Our ALGO engine triggered a buy signal for Sydney Airport into yesterday’s ASX close at $7.05.

The “higher low” chart formation is referenced to the $6.90 intra-day low posted on May 17th.

SYD has now been added to our ASX Top 50 Model portfolio.

As a medium-term strategy for investors, we are looking to buy SYD shares at current levels and sell the $7.25 Calls into March.

The option is current priced at 30 cents and SYD will go ex-dividend for 18 cents in late December. As such, this Buy/Write strategy would add 48 cents of value into client portfolios.

Sydney Airport

 

Local Oil Names Drop Sharply After WTI Spikes Lower

Posted on | by Todd

Shares of ASX oil names are under pressure in early trade as West Texas Intermediate Crude Oil (WTI) prices dropped over  4% overnight.

WTI prices fell by close to $4.00 per barrel to $70.40 as a confluence of bearish news hit the market.

Increased trade friction between the US and China pushed WTI lower in Asian tarde, while news that Liyba and Saudi Arabia have increased production by a combined 800,000 barrels per day pushed the market through key support levels.

As illustrated in the chart below, WTI has rallied more than $10.00 over the last 5 weeks, which now places initial support $3.00 lower near $67.00.

Similarly, local oil names, OSH, STO, WPL and ORG have rallied over the last month and appear to have more downside price potential over the near-term.

OSH will announce their quarterly production report next Tuesday and STO and WPL will release their reports next Thursday.

We have traded both sides of these names over the last 12 months and will update with specific entry levels near lower technical support areas over the medium-term.

WTI Crude Oil

Origin Energy

Oil Search

Santos

 

Woodside Petroleum

ORG Slips Lower In Front Of FY18 Report

Posted on | by Todd

On May 30th, ORG was added to the ASX Top 20 index to replace the dissolved  WFD entity.

Since many Super funds and managed equity firms have a mandate to hold a percentage of listed index shares, we expected ORG to get a boost from the listing.

Since then, the share price has risen by over 8% and posted a 3-year high at $10.27 on Monday.

ORG will release its Quarterly report on July 31st and it looks like the share price could slip lower in front of that announcement.

With the expectations of FY18 NPAT rising by up to 2.6%, we see scope for the stock to hold the $9.20 support level and reach the $10.60 price range after the quarterly report.

Origin Energy

 

 

 

ALGO Update: AGL Continues To Drift Lower

Posted on | by Todd

Our ALGO engine triggered a sell signal for AGL on May 2nd at $22.50.

At the time, we suggested selling  $23.00 call options into September, so investors would receive increased cash flow as well as the 54 cent dividend on August 23rd.

Performance reports from both the Loy Yang A and Bayswater facilities have failed to generate strong buying interest and we remain neutral on the stock.

Daily charts suggest the next level of support for AGL is near $21.35.

AGL

CIM Firms In Front Of Next Week’s Half-Yearly Report

Posted on | by Todd

Shares of Cimic Group continue to build on last week’s gains in the lead up to next week’s Half-yearly earnings report.

Since posting an intra-day low of $39.60 on June 6th, the share price has risen over 9%.

Our ALGO engine triggered a buy signal on June 1st at $40.73 and CIM is part of our ASX Top 100 Model Portfolio.

Next week’s report is expected to show NPAT at $341 million and a 62.4 cent DPS.

Daily price charts point to a medium-term target near $46.40.

Cimic Group

ALGO Update: CSR Is Finding Support at $4.50

Posted on | by Todd

Our ALGO engine triggered a buy signal on CSR at $4.64 on June 15th.

The “higher low” pattern is referenced to the $4.36 low posted in November of last year.

Internal momentum indicators are beginning to firm suggesting solid investor support in the $4.50 area.

CSR will pay a 13.5 cent dividend in November and we see a medium-term upside target around $5.45.

CSR

 

 

ALGO Update: CTX Is Approaching The Buy Zone

Posted on | by Todd

Our ALGO engine triggered a sell signal on CTX on June 21st just above $31.25.

A recent broker note has updated its rating on CTX to “outperform” and given the share price a 12-month target of $37.00.

The share price has come under pressure over the last few sessions as  last week’s fuel supply extension with Woolworth’s was expected to result in an $80 million reduction in CTX’s EBIT.

We expect the share price to find support around the $30.50 area and will update on specific buy levels in a future posting.

Caltex

 

ALGO Sell Signal For Commonwealth Bank

Posted on | by Todd

Our ALGO engine triggered a sell signal on CBA into yesterday’s ASX close at $75.65.

The “lower high” pattern in the stock is referenced to the high posted at $77.50 on March 12th.

Subsequently, CBA has been removed from our ASX Model portfolio after being held for 148 days with a net gain of 1.52%.

Recent reports from both Citi and Morgan Stanley show the brokers have retained their sell ratings on CBA following its decision to demerge its wealth management operations.

Citi now has a downside target of $72.00 and Morgan Stanley is expecting the stock to drop over 15% to $64.00 over the next 12 months.

With this signal on Friday, our ALGO engine is now showing sell signals for all of the domestic banking names with the exception of MQG.

CBA

ALGO Buy Signal For Rio Tinto

Posted on | by Todd

Our ALGO engine triggered a buy signal on RIO Tinto into yesterday’s ASX close at $79.20.

The “higher low”  share price pattern is referenced to the $77.40 low posted on April 17th.

The share price reached a 2-month low of $78.30 yesterday on continued downside pressure on both Iron ore and Copper.

However, a recent broker note from Credit Suisse  included a an “outperform” rating with an upside target just over $89.00.

The report cited the recent sale of the miner’s Grasberg asset  in Indonesia as providing additional cash to follow through on their $1.3 billion share buyback plan announced earlier this year.

Frequent Blog readers would have noticed that our ALGO engine has triggered buy signals on several resource names (as well as ETFs) over the last month. These include OZL and FMG.

In addition, several commodity and metals-based indexes are testing multi-year support levels as the combination of a stronger USD and threats of trade wars continue weigh on the sector.

In general, we believe a recovery in the broad commodity sector will take more time to form a sustainable base. As such, we’ll watch these resource sector names closely and update investors on specific entry level in future postings.

Rio Tinto

 

 

 

 

CYB To Re-Brand To Virgin Money After Acquisition

Posted on | by Todd

Shares of CYB remain firm as the beneficial synergies of the Virgin Money acquisition begin to crystallize into forward guidance estimates.

Reports show that CYB will spend GBP 60 million to re-brand all of its businesses to Virgin Money, but overall, the amalgamation will result in over GBP 120 million in cost savings.

It’s expected that these savings will equate to around 13% EPS growth over the next 18 months and lift the dividend to 25 cents per share.

Our ALGO engine triggered a buy signal in CYB in July of last year at $4.35. We have a medium-term upside target in the $6.25/35 range.

CYB