WPL Gets A Boost From WTI

Posted on | by Todd | Leave a Comment on WPL Gets A Boost From WTI

Shares of WPL reached a high of $29.25 in early trade as West Texas Intermediate (WTI)  crude oil posted its largest single session gain in over three weeks.

The front month WTI contract rose $1.30, or 2.2%, following a report that crude stocks have dropped by 600,000 barrels at the US storage hub in Cushing, Oklahoma.

WPL is part of our ASX Top 20 Model Portfolio and our ALGO engine triggered a buy signal on February 20th at $29.10.

The stock has been a tepid performer over the last few weeks after announcing a rights issue and going ex-dividend.

However, the technical picture is improving and a break back above the $29.66 level will likely extend into the gap from $30.90 from mid-February.

Woodside Petroleum

 

 

 

 

ALGO Update: Stay Short SUNCORP

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After releasing a less-than-stellar H1 earnings report on February 15th, shares of SUN have rallied close to 7.5% from $12.60 to $13.50.

We believe this relief rally has run its course and the share price will resume its downtrend, which commenced back to July of last year.

The 19% drop in cash earnings was SUN’s most glaring miss in the H1 report, which will act as a headwind for the stock going forward.

Our ALGO engine triggered a sell signal at $14.05 on November 10th.  The initial downside target is $12.60, with a $14.35 stop.

SunCorp

 

 

 

BOQ Is Back Below $12.00

Posted on | by Todd | Leave a Comment on BOQ Is Back Below $12.00

Our ALGO engine triggered a sell signal for BOQ at $12.74 on February 27th.

The technical “lower high” price structure is related to the November 30th high at $13.20 and the November 1st high at $13.40.

We expected the $13.10 resistance level to hold before reverting back below the $12.00 handle.

CFD traders who took this trade can look to cover short positions in the $11.90/95 area.

We maintain our short bias on the banking sector in general, but consider BOQ mildly over-sold.

Bank of Queensland

 

 

Bega Is Looking Better

Posted on | by Todd | Leave a Comment on Bega Is Looking Better

Shares in Bega Cheese Ltd are up .75% at $6.75  after UBS released a positive market note on the company over the weekend. 

BGA had dropped about 8% since the half-year results released  last Wednesday, despite an improvement in all key financial metrics over the previous corresponding period.

However, it seems the market might have been too harsh on the dairy company.  Bega’s first-half normalised EBITDA of $70 million exceeded the $64 million forecast by the street.

We see scope for BGA to reach $7.42 a share and find the stock attractive at the current price, based on 20X earnings.

Our ALGO engine triggered a buy signal in BGA at $6.81 on January 16th. BGA will go ex-dividend tomorrow paying 5.5 cents per share, fully franked.

Bega Cheese

 

 

ALGO Update: LLC Is Approaching Overbought Territory

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Our ALGO engine triggered a sell signal in LLC into the ASX close at $17.88.

The “lower high” pattern is referenced to the October 17th high of $18.70.

Shares of LLC have risen about 16% since posting solid H1 results three weeks ago, which included a $500 million share buyback scheme over the next 12 months.

However, the internal momentum indicators are now approaching overbought territory.

We see strong technical resistance in the $18.15/20 area and expect the share price to revert back to the $17.20 support area over the near-term.

Lend Lease

 

ALGO Update: Buy Fortescue Metals

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Shares of FMG are flat after the company announced a refinancing package which will lower their annual borrowing costs by more than US$130 million per year.

The package is in the form of US$ 500 million of senior unsecured notes at 5.125%.

This is a significant improvement to FMG’s capital structure, reflects confidence from senior management,  and should give the share price a boost over the near-term.

FMG is part of our ASX Top 50 model portfolio and our ALGO engine triggered a buy signal at $4.70 on May 15th.

We prefer the long side of FMG from $5.00 and suggest that inventors add the stock to their portfolio holdings.

Fortescue Metals Group

 

 

 

BlueScope Shares Retreat On US Tariff Threat

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Shares of BlueScope Steel rose to an eight-year high of $16.80 just after the ASX open today.

However, after Mr Trump’s announcement earlier to impose sweeping tariffs on imported Steel and Aluminium, BSL shares have slipped back to $16.35.

In its current form, the legislation would put a 25% tariff on the cost of imported steel to the US, regardless of the country of origin.

BSL is the sole exporter of Aussie steel to the US market which is worth about US$130 million per year.

Our ALGO engine triggered a buy signal for BSL on February 6th at $14.15.

At this point, we suggest that investors either exit their long positions outright, or look to sell the $17.00 calls into April for 42 cents to enhance portfolio returns.

BlueScope Steel

 

 

Dow Jones Breaks 16-Month Winning Streak

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The Dow Jones 30, along with the SP 500, has posted its first monthly loss since October of 2016.

This has been the longest monthly winning streak since 1959.

However, over the last two days, the DOW has lost over 700 points, or 3%.

And while these headlines will get the attention of investors, it’s the technical significance which should have investors concerned.

Both the DOW and SP 500 dipped below their respective 50-day moving averages, which opens up the probability of range extension to the downside.

As illustrated in the chart below, investors should be prepared to employ defensive strategies and take advantage of stock specific opportunities.

Dow Jones 30

 

 

 

Keep Ramsay On The Radar

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Shares of RHC remain under pressure and have posted a 6-month low of $62.50 in early trade.

This is on top of yesterday’s 5.75% drop after a weaker profit report.

RHC, Australia’s largest private hospital operator, reported a 3.7% fall in H1 profit to $246 million; most of the weakness is from hospital operations in the UK.

From a technical perspective, the daily price chart shows solid support in the $61.50 to $61.20 area dating back to June 2016.

We’ll  update our signals on RHC and look for a reasonable level to enter the stock.

Ramsay Health

 

ALGO Update: SHL Still Looks Expensive

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Our ALGO engine triggered a sell signal in SHL on February 5th at $24.85.

In the company’s recent earnings report, their 2018 guidance expects growth in the 6% to 8% range.

This places SHL at 22.5 times earnings, which is considerably higher than its industry peers.

Technically, the next key support level is found at the February 15th low of $23.10.

Sonic Health