Shares of TAH have been rising steadily since dipping to $4.50 on August 7th.
Recent comments from management in front of their AGM reflect confidence that the company will deliver stronger earnings, dividends and synergies from the Tatts acquisition.
Technically, we see a price inflection point at the $5.00 level which could extend up to the February highs near $5.25.
Tabcorp
Our ALGO engine triggered a buy signal for WOW on Monday at $27.45.
This “higher low” pattern is referenced to the $26.40 low posted on April 20th.
WOW shares have been drifting lower for the last two months and are now consolidating in the $27.30 to $27.60 range since going ex-dividend for 60 cents last week.
With the current share price trading at 22x earnings, we see the stock as good value above the $27.00 level.
WOW was added to our ASX Top 20 model portfolio on August 22nd. Our medium-term target is $29.40
Woolworths
Since slumping to a 7-year low of $2.60 on June 28th, shares of Telstra have risen over 20% during the last two months and reached $3.26 earlier today.
Part of the improvement in the domestic Telecom sector has stemmed from the merger of TPG and HTA, and the increase in scale for all the local providers.
In addition, we see TLS having a distinct advantage over its rivals with the 5-G network expanding revenue streams beyond traditional voice and data services.
As such, we believe the share price will continue to trend higher and the current dividend ratio is sustainable. The next technical chart level is just above $3.60.
Telstra
Our ALGO engine triggered a sell signal for AMC on August 2nd at $15.25.
The share price reached a 3-month low of $13.62 in early trade today and is entering into an oversold chart pattern.
Despite the recent uncertainty of trade friction between the US and China, we believe the outlook for the paper and packaging sector will remain stable and input costs will continue to drift lower.
We see technical support in the $13.35 area and would not be surprised to see a ALGO buy signal above $13.00.
Amcor
Recent hurricane activity in the US has overshadowed a report from the International Energy Agency which showed daily Crude Oil production from OPEC climbed by 420,000 barrels for the month of August to just over 32 million barrels per day.
That increase in output has more than made up for the potential decline in Iranian production due to US economic sanctions.
With this in mind, we see topping patterns in both WPL and OSH on the daily charts.
We don’t have recent signals on either stock at the moment.
However, we would expect the recent increase in production, coupled with the risk of lower demand, will put downside pressure on both of these names over the near term.
Woodside Petroleum
Oil Search
Our ALGO engine triggered a buy signal for Flight Centre into Friday’s ASX close at $55.40.
This “higher low” formation is referenced to the intra-day low of $54.20 posted on April 24th.
Despite reporting a full-year profit of $384 million on August 20th, the share price has dropped over 20% during the last three weeks.
FLT has one of the strongest balance sheets on the local market with just $35.5 million in debt translating into a respectable $517.5 million net cash position.
As such, we believe the share price has reached oversold territory and will likely find solid investor support near the $54.80 level.
Flight Centre
Our ALGO engine triggered a buy signal for Aristocrat Leisure yesterday at $28.90.
As illustrated on the chart below, this ‘higher low” pattern is referenced to the May 23rd low at $27.58.
Although a recent earnings update stated that ALL’s digital revenue may not be increasing as fast as expected, revenue from older games continues to accelerate.
The company has forecast earnings of $1.40 per share for FY 2019, which fixes its current price at 20X forward earnings.
Internal momentum indicators have turned positive and we expect a move into the $32.00 area over a 6 to 8 month time horizon.
Aristocrat Leisure
Our ALGO engine triggered a buy signal for SBM into yesterday’s ASX close at $3.62.
This “higher low” pattern is referenced to the intra-day low price of $3.27 posted December 13th.
In the company’s last report, SBM stated that production costs for Gold were revised to a record low of $907 per ounce, down 3 per cent compared to 2017.
This allowed the gold miner to achieve a record cash flow from operating activities of $303 million for FY 2018.
As such, SBM was able to repay all its debt and the company had almost $200 million cash in the bank after paying its first dividend since 1995.
Overnight losses in spot Gold may pressure the share price back to initial support at $3.50. We have a medium-term upside target in the $4.80 to $5.00 area.
Santa Barbara Limited
Our ALGO engine triggered a buy signal for SUN into yesterday’s ASX close at $14.32.
This “higher low” pattern is referenced to the low of $13.27 posted on January 6th.
As illustrated on the chart below, we still see scope for SUN to probe lower on fundamental headwinds impacting both the banking and insurance sectors.
As such, we will look for the stock to trade lower, into the $13.00 handle, before committing funds to the long side.
Suncorp
Since dropping to a 10-month low last week at $18.75, shares of Newcrest have lifted over 4% as the price of gold has stabilized.
It’s worth noting that NCM posted a 2% increase in revenue and a 16% rise in underlying profit in their FY18 results last month.
NCM is still under an ALGO buy signal and was added to our ASX Top 100 portfolio on July 19th at $20.05.
We still prefer the long side of NCM and see initial resistance in the $22.35 area over the medium-term.
Newcrest
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