CBA Admits To 53,000 AML Breaches

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In what could be described as the largest plea deal in Australian corporate history, CBA admitted it breached the AUSTRAC money laundering regulations over 53,000 times.

The bank’s lawyers argue that a “computer glitch” was the cause for the breach and they are proposing that AUSTRAC prosecutes all of the 53,000 breaches as one infraction, as opposed to each one separately.

CBA also said it will defend more than 100 more serious allegations regarding failure to disclose suspicious transactions.

Our ALGO engine triggered a sell signal on November 13th at $81.52.

The share price has traded down to $79.55 and is still under a “lower high” chart structure. The combination of negative internal momentum indicators and growing fundamental headwinds keeps our trading bias negative on CBA.

The next significant support area is near the December 7th low of $78.30.

 CBA

 

CTX Jumps Higher On ACCC Ruling

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Shares of Caltex spiked 5% higher at the open as the ACCC ruled against the proposal for Woolworths to sell its portfolio of 527 service stations to BP; an estimated $1.8 billion deal.

After reaching a high of $35.00, CTX shares have now drifted lower but are still up over 4.0% at $34.80.

The price structure is still under the December 5th high of $35.70, which reflects a “lower high” trading pattern.

Caltex

 

ALGO Sell Signal For TPM

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Our ALGO engine triggered a sell signal in TPM at $6.36 on the ASX close on Friday.

After posting a low of $4.85 on September 28th, shares of TPM have rallied impressively on a series of fiber-optic contracts won from the South Australian state government.

However, the technical chart pattern is still defined by a “lower high” formation which suggests lower prices over the medium-term.

We see the next key support level at $5.90 and suggest exiting long positions at or around $6.40.

TPG Telecom

New High Close For Treasury Wine Estates

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Shares of TWE posted a new all-time high of $16.22 on the ASX close last Friday.

Our ALGO engine triggered a buy signal on TWE back in July at $12.55.

The stock is trading at 40X earnings with the 12 month EPS currently expected at just over 23%.

The internal momentum indicators look good and we would look to take profits on a move into the $16.90 to $17.00 area.

Treasury Wine Estates

5G Is Giving TLS A Boost

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Since posting a low of $3.34 on November 28th, shares of Telstra have gained over 10% reaching a high of $3.72 in early trade.

Much of this recent optimism in the company stems from TLS wrapping up the second phase of their transmission network upgrade and deploying their high capacity optical technology, which is known as “5G”

This increased capacity and faster download speed is shaping up as a winner as TLS is outperforming its rivals on the new iPhone X and iPhone 8 orders.

Because TLS has greater network capacity, they are able to charge a premium on these new mobile phone systems.

Technically, the next price hurdle will be at $3.83, which is the bottom end of a gap lower on August 29th.

  Telstra

 

Aussie Dollar Drops On Weaker Trade Balance Report

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The Aussie Dollar dropped close to 1% overnight as yesterday’s domestic trade balance numbers showed a steep contraction for the month.

The AUD/USD hit a six-month low at .7500 as the trade surplus fell to $105 million from $1.6 billion the month before. The street had expected a surplus of $1.4 billion……10 times higher than the actual print.

The sharp drop was driven by a 3% fall in exports and a 2% increase in imports. Details of the report showed much lower levels of exports of Iron ore and coking coal.

There are several names on the ASX that earning revenue overseas and will benefit from the falling Aussie Dollar.

These include QAN, RHC, TWE and NCM.

QANTAS

Ramsay Health Care

Newcrest Mining

Treasury Wine Estates

ALGO Update: QANTAS Shares Are Ready To Takeoff

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Our ALGO engine triggered a buy signal in QAN on November 24th at $5.60.

In the days after that, the share price slipped down to $5.30 as crude oil prices rallied into the OPEC meeting and the Aussie Dollar traded back into the .7600 handle.

Both of the those fundamental headwinds have been reversed and the share price has reached the $5.50 level in early trade.

Shares of QAN are over 70% higher than the January lows, which makes the company one of the best performers on the ASX this year.

We expect that the combination of their share buy-back program, lower operating costs and rising international capacity growth will support the share price into Q1 2018.

Investors looking to profit from QAN shares can either buy them outright or buy their CFDs on our SAXO Go platform.

QANTAS

 

Higher Funding Costs Weigh On The Banks

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Shares of the major banks have traded on both side of the ledger since the announcement of the Banking Royal Commission last week.

There’s been plenty of articles written about what the impact will be and what investors can expect from the share price and dividends from these blue-chip companies.

However, one of the areas of the banking business which has not received much press is the negative impact from increased funding costs for the banks from overseas lenders.

Over the last two years, CBA, WBC and the NAB have issued over $145 billion in long-term wholesale debt to overseas lenders.

This is up from just under $110 billion in FY 2015 and reflects the increased reliance that the local banks have on overseas lenders

We would expect the increased in funding costs, combined with lower domestic loan margins, to cap any protracted rallies in the local banks over the next 12 months.

Our ALGO engine triggered a sell signal for the CBA on November 10th at $80.90. This is in addition to the ALGO sell signals in SUN at $14.20 and BEN at $12.30.

CBA

SunCorp

Bendigo BAnk

 

 

ALGO Update: OSH Is Back In The Sell Zone

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Our ALGO engine triggered a sell signal for OSH on November 11th at $7.50.

Since then the share price traded as low as $7.00 last week.

A combination of the OPEC production agreement last week and the PNG LNG expansion this week has seen the share price rally back over $7.30.

We still prefer the Short side of OSH back below $7.00 on lower longer-term Crude Oil prices.

We suggest short-term investors look to sell OSH CFDs on our SAXO Go trading platform.

Oil Search

 

RIO’s CEO Flags A Chinese Slowdown

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Shares of mining giant RIO Tinto are over 1% lower at $71.25 as company CEO, Jean-Sebastian Jacques expressed a negative view on the Chinese economy over the near-term.

While addressing investors in Sydney yesterday, Mr Jacques predicted a slowdown in construction, infrastructure growth and automotive demand from China over the next six months.

The company also announced that they would close some Iron Ore mines over the Christmas break as part of their “value over volume” strategy. Even with high-grade Iron Ore  price firming over the last 6-weeks, we consider the CEO’s message a negative signal for RIO shares.

Our ALGO engine triggered a buy signal in RIO back in April at $61.40. Even though the  ALGO engine has not triggered a sell signal, we suggest investors can take profits on long RIO exposure, sell a covered call to enhance cash flow, or go short the RIO CFD on our SAXO Go Platform 

The next significant level on the daily charts is near the October low of $68.50.

 

RIO Tinto