WBC Shares Rise After Solid Profit Report

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Shares of WBC are trading over 2% higher and have reached a 7-week high of $29.70 in early trade.

WBC announced today that their net profit and cash earnings were 7% and 6% higher than the corresponding six-month period.

However, even though the cash earnings equals $1.25 per share, the bank said that they would hold its dividend at 94 cents per share, fully franked.

We see the next key resistance level at $30.40 and medium-term support near the April 27th low of $27.60.

Westpac Bank

 

 

Will US “Stagflation” Be Bullish For Gold?

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One of the main policy points from Wednesday’s FOMC meeting was that the US Central bank will accept an overshoot in inflation even if overall GDP growth starts to slow……..more commonly known as Stagflation.

Stagflation is an economic condition which is characterized by higher inflation and lower GDP and employment growth, which is not bullish for equity markets and not bearish for Gold.

Over the last 6-months, Gold has been trading in a broad pennant formation bound by $1365 on the topside and supported at $1300 at the lower end of the range.

Due to recent USD strength, the yellow metal is currently trading near the bottom end of the range near $1315.

If US inflation rates continue to probe higher, we expect the USD/Gold correlation to soften. In an inflationary environment, Gold and the USD usually move higher simultaneously.

As illustrated in the charts below, the local gold mining stocks have been showing divergence with SBM, EVN and SAR near all-time highs, while NCM is trading at $21.55, almost $3.00 below its 52-week high.

Our base case is that Gold will rise over the medium-term, which should be supportive for the local mining names.

For more information on investment strategies within the Gold sector, call our office at 1-300-614-002.

Santa Barbara Mines

Saracens Mineral

Evolution

Newcrest Mining

Technical View Improving For Tabcorp

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Shares of TAH have had their strongest week in 3 months despite mixed news about increased competition and lower overall wagering forecasts.

The share price posted a high of $4.52 yesterday but has slipped back to initial support near $4.35 in early trade today.

We still prefer the long side of TAH and are expecting run back over the $5.20 area over the medium-term.

Based on the current price, TAH is yielding 4.6% on this year’s dividends.

Tabcorp

 

 

 

ALGO Buy Signal In BBOZ

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Our ALGO engine triggered a buy signal in the BBOZ  ETF into yesterday’s ASX close at $14.80.

BBOZ is an inverse equity ETF based on the shares which trade in the ASX 200 index.

Since BBOZ is an inverse ETF, the price will rise as the ASX 200 index trades lower.

The “higher low” buy signal is referenced to the January 14th low of $14.40.

With the ASX 200 index trading near the highs of the year, investors can look to buy BBOZ to hedge their exposure to a wide basket of shares in just one ASX regulated transaction.

As the local share index has rallied sharply over the last 4-weeks, the price of BBOZ has dropped over 14% from $16.85 to $14.50.

For more information about how to profit with trading strategies in the BBOZ ETF, call our office at 1-300-614-002.

BetaShare BBOZ ETF

 

NAB Reports Lower Half-Yearly Profits

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Shares of NAB are down over 1.5% in early trade as the bank reported a 16% drop in half-year cash profit as it booked a restructuring-linked costs related to workforce reduction.

The bank posted cash earnings, that excludes one-offs and non-cash accounting items, of $2.76 billion for the six months ended March 31, compared with $3.29 billion last year.

NAB bank maintained its interim dividend at 99 cents per share, which puts it on 13.2 times earnings.

Our ALGO engine triggered a sell signal for NAB on February 27th at $30.40.

The technical picture is fairly neutral, and with NAB going ex-dividend on May 16th, we see initial support in the $28.50 area.

NAB

 

FMG Continues To Look Attractive

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Shares of FMG have posted as 6-week high at $4.75 as the Iron Ore miner reaffirmed FY18 shipments of 170 million metric tons.

It’s worth noting the Q4 is typically FMG’s strongest quarter for shipments.

This should continue this year as the company broadens its customer base to include low-grade ore users like India.

We still prefer the long side of FMG and have a medium-term price target of $5.35.

Fortescue Metals Group

Suncorp Near Resistance At $14.20

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Recent research on SUN has outlined a number of earnings hurdles the company will face for the rest of 2108 and into next year.

The hurdles include a higher trajectory of operating costs, findings of the royal commission on the insurance industry and lower Gross Written Premium growth.

All of these combined will likely lead to a lower underlying profit margin outlook.

Technically, our ALGO engine triggered a sell signal last November at $14.20 and we see price resistance in this area.

Our initial downside target is $13.35, followed by $12.90 over the medium-term.

Suncorp

ANZ Gets A Lift From H1 Results

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ANZ posted a 4.1% rise in its half-year cash profit to $3.49 billion, boosted in part by a fall in its credit-impairment charge following the sale of a range of assets.

The bank held its H1 dividend unchanged at 80 cents per share as its impairment charges fell to $408 million from $720 million a year ago.

However, ANZ warned last week of a $620 million loss from the previously announced sale of a pensions and life insurance unit, as well as, a further $80 million in restructuring charges, some of which are related to the banking royal commission legal fees.

The technical picture for ANZ remains soft with daily chart resistance seen in the $27.40 area. 

ANZ

 

GPT Rallies Into Wednesday’s AGM

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Shares of GPT are up 1.5% in early trade in front of its AGM scheduled for Wednesday.

In the March quarter, GPT reported total shopping center comparable MAT growth of 2.1%, with 34,100 sqm of leasing space signed in the quarter and the acquisition of Sunshine Business Park in Melbourne for $74 million, with an initial yield of 6.1%.

The share price has hit $4.80 so far this morning and will see further resistance in the $5.00 area.

We consider GPT a solid “Buy/Write” strategy at current levels as the sold call option premium will enhance portfolio cash flow.

GPT will pay a 12.3 cent dividend on June 29th, which places its annual yield around 5.00%.

General Property Trust

 

Westfield’s French Connection

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Over the last three weeks, the $33 billion takeover offer of WFD by French commercial property company Unibail-Rodamco has moved a few steps closer to completion.

Following the approval from French regulators, the Australian Foreign Investment Review Board also gave the transaction the green light to proceed; shareholders will vote at the AGM on May 24th.

As illustrated in the charts below, since part of the $10.00 per share offer includes Unibail script, the price of WFD has been following price of Unibail shares higher.

WFD was added to our ASX Top 20 Model Portfolio on February 7th at $8.90 and our ALGO engine triggered a buy signal on the same day.

Technically, the December high of $9.77 is the next key level of resistance. We suggest shareholders look to add to long positions into the AGM and take profits or use a covered call strategy in the $9.70 price range.

This has been a very popular trade on our SAXO Go CFD platform. For more information on WFD or CFD trading opportunities, call our office at 1-300-614-002.

Unibail-Rodamco

Westfield Corp LTD