ALGO Sell Signal For QANTAS

Posted on | by Todd

Our ALGO engine triggered a sell signal for QANTAS into yesterday’s ASX close at $5.90.

This “lower high”pattern is reference to the intraday high of $6.30 from September 12th.

On October 25th, we posted a report to buy QAN in the $5.40 area on the basis of lower oil costs and steady earnings growth.

At this point, it looks like oil prices are overdue for a rebound higher, which could pressure QAN back into our $5.40 to $5.35 buy zone.

As such, we suggest taking profits in QAN.  At current levels the return will be just over 8%.

We will look for another ALGO buy signal in the $5.30 area.

QANTAS

 

Has The Bounce In The XJO Run Out Of Momentum?

Posted on | by Todd

After sinking to 5624 on October 26th, the XJO index has rebounded over 5% to reach a 3-week high of 5933 on Friday.

As illustrated on the chart below, this retracement looks to have found resistance near the 30-day moving average at 5920.

We consider this technical level an important inflection point in determining the near-term direction of the index.

The next key resistance level will be 5965. However, a break of the 5815 level will suggest a retest of the previous low.

XJO Index

 

Look For Gold To Hold The $1190.00 Level

Posted on | by Todd

Daily price volatility in Gold has reached a 7-month high as investors weigh the impact of equity market uncertainty to higher interest rates in the USA.

Since trading as low as $1160.00 in mid-August, the yellow metal rallied close to 10% to post an intraday high of $1243.00 on October 26th.

From a technical perspective, we consider the wider intraday trading ranges as an opportunity for investors to profit from the increased activity in the local mining shares.

Both EVN and NST are currently in our ASX Top 100 model portfolio.

We will update specific entry levels in those names as Gold finds traction above support at $1190.00

Northern Star

Evolution Mining

 

 

ALGO Sell Signal For Westpac

Posted on | by Todd

Our ALGO engine triggered a sell signal for WBC into the ASX close at $27.70.

This “lower high” pattern is referenced to the intraday high of $28.35 posted on September 28th.

WBC will go ex-dividend for 94 cents on Tuesday.

With round 7 of the Royal Commission scheduled to start on November 19th, we remain cautious of the price structures and forward margin growth of the domestic banks.

As such, we see scope for the local banking names to retest the October lows over the near-term.

Westpac

 

 

JHX Is In The Buy Zone

Posted on | by Todd

Shares of James Hardie have dropped over 17% in the last three trading sessions and posted a 2.5-year low of $16.60 in early trade today.

The catalyst for the sell off was that JHX’s 2Q EBIT and NPAT fell short of consensus forecasts and management downgraded full year NPAT by 5%.

In the bigger picture, the softening of Q2 margins due to input cost inflation looks to be transitory and the group is still expected to generate net profits of between US313 and US 335 million for FY 2019.

As such, we consider the recent drop in the share price as an opportunity to invest in a high quality business at a time when external factors are increasing input costs.

JHX is part of our ASX Top 50 portfolio and we see scope for a $20.00 initial price target over the medium-term.

James Hardie

 

Investors Brace For CBA’s AGM Today

Posted on | by Todd

Since posting an intraday low of $65.60 on October 26th, shares of CBA have risen over 5% and reached $69.90 in early trade today.

Investors have cause to be pensive as the banking giant will hold its AGM in Brisbane today and round 7 of the bank Royal Commission will start on November 19th.

We see technical price resistance in the $70.25 area and initial support at $67.30.

Commonwealth Bank

 

 

 

Look For A Bounce In Tabcorp

Posted on | by Todd

It’s been estimated that over $250 million was wagered on yesterday’s Melbourne Cup.

It’s reasonable to believe that many punters would have placed bets using one of the TAH platforms.

TAH has been an enigma for investors over the last three months as the share price has traded in a narrow $4.50 to $5.00 price band.

It’s worth remembering that TAH reported a 71% jump in earnings in their last update and is currently priced at a 4.60% yield.

TAH is part of our ASX top 100 portfolio and we suggest accumulating shares at current levels for a move back over $5.25 over the medium-term

Tabcorp

BHP’s Rally Won’t Be Derailed

Posted on | by Todd

Shares of BHP have slid lower in early trade as the mining giant has suspended all iron ore operations in WA after a runaway train with 268 wagons had to be derailed.

We don’t see this as an impediment to the pace of exports out of Port Hedland or the $14 billion share buy back and special dividend program.

BHP has been on an ALGO buy signal since September 11th at $31.20.

We see good technical support in the $32.85 area and initial resistance just under $35.00.

BHP

ALGO Buy Signal In South 32

Posted on | by Todd

Our ALGO engine triggered a buy signal for S32 last Friday at $3.51.

This “higher low” patterned is referenced to the intraday low of $3.35 posted on September 5th.

After a solid quarterly report two weeks ago, the share price spiked to a new all-time high of $4.28.

Since then, the share price has dropped over 17%, which is what triggered the ALGO signal last week.

S32 is a diversified miner and exports a range of minerals from Alumina to Manganese.

As such, we believe that S32 shares will find investor support above $3.00 for another run at the $4.00 handle over the medium-term.

S32

 

 

 

Buy The Dip In QANTAS

Posted on | by Todd

QAN released their Q1 trading update today.

With total revenue up 6.3% and forward bookings up 8% on the same period last year, we expected the share price to have risen in early trade.

However, with widespread downside pressure across the ASX today, QAN has slipped to $5.40.

This is in the middle of our recent $5.45 to $5.35 buy zone. As such, we suggest investors add to long positions with a medium-term price target in the $7.20 range.

QANTAS