ALGO Update: CTX Continues Slide Lower

Posted on | by Todd

Shares of Caltex have dropped over 10% this week, posting a 3-month low of $30.10 this morning,  as investors continue to sell the stock after a disappointing 1H 2018 result.

The worst part of the report was that the fuel division posted a $314 million profit, which is below the lower end of the company’s $315 to $335 million guidance.

In addition, corporate costs rose to $31 million compared to $21 million at the same time last year, which prompted a lowering of the interim dividend from 60 cents to 57 cents.

Our ALGO engine triggered a sell signal for CTX on June 26th at $32.68.  We see scope for a key support area near the $29.00 area.

Caltex

 

 

 

Spot Gold Posts A Weekly Reversal Higher

Posted on | by Todd

After sliding more than $200.00 over the last four months, Spot Gold snapped a six-week losing streak to close at $1205.00.

Yesterday’s 2.0% rally was supported by the combination of a slightly lower US Dollar and a record high short positioning from retail speculators.

The technical indicators suggest Gold bulls have a bit more work to do to before a sustainable reverse in trend can be established. A NY close above resistance at $1212.00 would confirm a major low is in place.

We currently have ALGO buy signals for both NCM and EVN and both stocks are part of our ASX Top 100 portfolio.

We suggest adding to long positions in both of these names with  medium-term targets of $23.35 and $3.65, respectfully.

Newcrest Mining

Evolution Mining

 

 

Star Group Shines After FY Earnings Report

Posted on | by Todd

Shares of Star Entertainment have surged over 7% higher to reach a two-month high of $5.45 in early trade.

The company released full-year results this morning which showed underlying profits rose 20% to $258 million versus the street’s estimate of $248 million.

Much of increase was focused on foreign “high rollers” which lifted SGR’s turnover by 54% to $61 billion.

We see chart resistance at $5.50 over the medium-term.

SGR goes ex-dividend for 13 cents on August 28th.

Start Group Entertainment

ALGO Update: Stay Short Bank of Queensland

Posted on | by Todd

Shares of BoQ are trading lower for the third consecutive day and are now pressing initial support at $11.00 in early trade.

Our ALGO engine triggered a sell signal on August 28th at $11.28. The “lower high” pattern was referenced to the intra-day high of $12.00 posted on March 12th.

BoQ has been the focus of several recent downgrades ranging from “under-perform” to an outright “sell.”

The main concerns for the profitability of bank going forward are the weakening credit growth and higher offshore funding costs.

We see the next area of support near the $10.70 level, followed by the $9.60 low posted in mid-June.

Bank of Queensland

AGL Tumbles On Weaker Foward Guidance

Posted on | by Todd

Shares of  AGL have lost more than 6% over the last two sessions after a mixed full-year report was released on Thursday.

The top line data was impressive as the energy generator announced net profits surged to $1.6 billion, which is almost three times higher than the previous year’s profit of $539 million.

However, a large part of the increase in profits came from a $562 million gain on electricity derivative contracts, a segment of their business which lost over $250 million in 2017.

Along these lines, AGL indicated that based on a fall in the forward price curve, it expects wholesale prices (and their margins) to decline into 2019.

On balance, while the overall full-year NPAT beat most estimates, the downbeat forward guidance has weighed heavily on the stock price and points to lower levels over the short-term

The next key technical support level is in the $19.50 area, which would represent a 2-year low.

AGL

 

 

CBA Announces Lower Cash Profit

Posted on | by Todd

Shares of CBA have traded in a wide range in early trade today as investors react to the mixed full year result for the bank.

The bank announced a cash profit of $6.2 billion, which is a 5% drop from the previous year and largely attributed to the $700 million fine paid to AUSTRAC and other regulatory expenses.

CBA will pay a final dividend of $2.31 taking the full year payout to $4.31 per share.

It’s too early to tell if the drop in profit is due to “one-off” charges, or if the bank’s profit cycle has peaked. We remain cautious of the banking names and will revisit the sector’s valuation over the near term.

CBA

BHP Drifts Lower After Asset Sales

Posted on | by Todd

Shares of BHP have traded with a slight downward bias since announcing over $10 billion in asset sales last week.

Some of the investor uncertainty focuses on what the mining giant will do with the proceeds of the sales.

The company has signalled its intention to return all net proceeds to shareholders but has not outlined the timing or manner in which this will happen.

Technically, we see solid price support in the $32.50 area.

Factoring in the expanded share buyback scheme, an increased dividend and a special dividend could lift the share price back into the $37.00 area.

BHP

Amcor Slides Lower After Takeover Announcement

Posted on | by Todd

Shares of Amcor are down over 4.5% in early trade as the market digests the $7 billion (all script) takeover of US packaging peer, Bemis Company.

Logistically, the takeover bid maker sense since 85% of AMC’s revenue is from the US, Europe and the Middle East.

Along those same lines, a large proportion of AMC’s share registry is made up of international investors, which suggests the company will eventually de-list on the ASX to join the NYSE.

Monday’s announcement was not a surprise as the company has disclosed that they were in negotiations with Bemis for over a year.

Our ALGO engine has triggered several sell signals over the last week and we have been advising investors to either exit the stock or employ a buy/write strategy into October.

The next key technical support level will be found in the $13.90 to $14.00 area.

Amcor

Banks Brace For Round 5 Of The Royal Commission

Posted on | by Todd

The Big four banks will be in the spotlight this week as the Banking Royal Commission commences round five today in Sydney.

The main topic for this round of examination will be the fees, charges and weak performance of bank-managed superannuation funds.

One Melbourne-based think tank has estimated that excessive fees and poor performance can cost superannuation investors up to $12 billion per year.

Australia’s largest superannuation provider, AMP, felt the wrath of the Royal commission during the last round of testimony, which saw their share price drop over 30% and the sacking of its chairman, CEO and three other directors.

The chart below illustrates the performance of AMP’s share price relative to the other Big 4 banks.

We don’t have ALGO buy signals for any of the domestic banks and we’re not holding any banking names in our ASX Top 100 portfolio. However, we will look for signals as the share prices approach the June lows.

 

 

 

ALGO Buy Signal For RIO Tinto

Posted on | by Todd

Our ALGO engine triggered a buy signal for RIO Tinto into the ASX close yesterday at $76.50.

This “higher low” chart pattern is referenced to the intra-day low of $72.30 posted on April 9th.

Despite the announced expansion of their share buyback program, RIO’s share price slid more than 5% last week to hit a 3-month low of $76.15.

We calculate that the stock is currently on a 4.5% yield and will go ex-dividend for US $1.70 on Thursday the 9th of August.

From a technical perspective, we see solid support in the $73.25 area.

Rio Tinto