As the Algo Engine identified the “higher low” price pattern in both Woolworths and Origin Energy, we’ve regularly highlighted these as preferred buying opportunities.
We’ve remained buyers of ORG and WOW throughout the past 12 months but now feel that we’re approaching a level where we see full value.
Resistance in ORG will likely be found at or near $8.00 and WOW is likely to experience selling based on valuation grounds at or near $27.50.
Following recent Algo Engine buy signals, we continue to hold WOW, BHP and ORG as preferred holdings.
On June 23rd, the ALGO engine triggered a buy signal on ORG at $6.90.
Shares of ORG got a boost today as news of a multi-billion dollar gas resource was found in the Northern Territories.
Origin estimates that up to 6.6 trillion cubic feet of gas is in the area based on a 57-day production test. That volume is enough to cover Australia’s domestic gas needs for over five years.
We have a medium-term upside target of $8.00 and would consider ORG as a good buy/write strategy to add value to investor’s portfolios.
Origin
We’ve been highlighting the buying opportunities in WOW, ORG, IPL, GPT, TCL & SYD over the last few weeks.
We continue to like these names and see supportive technical and fundamental factors, which we believe will create investor value.
Woolworths, Woodside, Medibank & Origin look like they’re setting-up as strong buy signals.
Other names which we view favourably from recent ALGO alerts include, SYD, TCL & GPT.
Our Algo Engine has flagged a second buy signal within the uptrend on Origin that started back in January 2016.
The first “buy on the dip” signal occurred in March 2017 at $6.25 and now a new Algo Engine buy signal has been triggered at $6.90.
WPL, OSH and ORG are all likely to find support and trade higher from the current price levels.
Over the last 10 trading sessions, WTI Crude Oil has dropped over 13% from $52.00 to last nights low of $45.20.
Technically, we see good support near the $43.75 area, which was the reversal low posted on May 5th.
Fundamentally, increased political tensions between OPEC members Qatar, Saudi Arabia and Iran could escalate into military engagement with some associated levels of supply disruption in the near-term.
As such, we have been looking to buy the dip in some of the local energy names like Origin Energy and Oil Search. (The ALGO engine gave a buy signal on OSH yesterday)
Further, we have also suggested that investors looking for a mean reversion higher in Crude oil prices can buy the BetaShare Oil ETF with the symbol OOO.
OOO traded as high as $8.10 just a week ago and has now in the low $7.00 area.
BetaShare Crude Oil ETF
Origin Energy
Oil Search
Origin Energy has been trading in a broad range between $6.70 and $8.10 over the last four months.
We recently took profits for client portfolios at $8.00 and are currently looking for a retracement into the $7.50 area to re-enter long positions.
The recent weakness in crude oil has had a dampening effect on various energy names. However, we feel Origin’s natural gas assets will keep the share price fairly well bid over the medium to longer-term.
Origin
We continue to track the Betashares oil ETF OOO.AXW
Oil prices have rallied from the recent low after this week’s largest inventory drop of 2017. EIA data has revealed U.S. crude stocks fell by 5.2M barrels. In addition, OPEC supply cuts have been agreed to by Iraq and Algeria joined Saudi Arabia.
Concerns regarding the abundant added supply of US shale oil will keep a lid on any meaningful rally, but we may see a bounce from the recent low. Investors should run stop losses under the trend low on both ETF and individual stock names.
Our best performing energy trade has been the long ORG position. However, due to the extended price rally since the Algo Engine buy signal, we’re now inclined to take profit in ORG and consider the OOO.AXW ETF as a replacement.
ORIGIN INCREASES INTEREST IN PROSPECTIVE BEETALOO JOINT VENTURE TO 70%
Origin Energy Limited (Origin) today announced it had increased to 70% its share in the Beetaloo Joint Venture after acquiring Sasol Petroleum Australia Limited’s (Sasol) 35% share.
Origin CEO, Frank Calabria said, “Having recently announced the discovery of a material shale gas resource in the Beetaloo Basin, Origin has seized the opportunity to increase its interest in the Beetaloo Joint Venture by acquiring Sasol’s 35 per cent share.
Our Algo Engine triggered a buy signal in early March at or near $6.25. We remain long the stock and see upside potential to $8.00.
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Investor Signals Pty Ltd
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