QAN Gaps Higher

Posted on | by Todd | Leave a Comment on QAN Gaps Higher

Shares of QAN have jumped at the ASX open and have reached a 4-week high of $5.20 in early trade.

Considering the headwind from the recent rally in crude oil prices, the stock has posted an impressive bounce off the January 10th low of $4.77.

The internal momentum indicators are pointing higher and our ALGO engine triggered a buy signal on December 8th at $5.25.

We expect to see additional gains into the March 7th dividend payment, with the next level of chart resistance near $5.60.

 

QANTAS

 

 

ALGO Update: Buy And Hold QANTAS

Posted on | by Todd | Leave a Comment on ALGO Update: Buy And Hold QANTAS

Our ALGO engine triggered a buy signal in QANTAS on December 8th at $5.25.

Since then the share price dipped to a low ow $4.84 on a combination of higher oil prices and a stronger AUD/USD.

With analysts forecasting QAN to post record earnings of 10.32% over the course of 2018, investors could expect shares of the flying kangaroo to reclaim some of last year’s upside trajectory.

Internal momentum indicators are pointing higher and the next key technical target is the mid-December high of $5.45.

QANTAS

 

 

Will The US Tax Reform Destabilize Global Banks?

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A key part of the US Tax Reform passed last week includes giving US companies a tax break on profits earned and kept in banks overseas.

As per the legislation, US firms can now repatriate offshore earnings at a tax rate of 15.5%, compared with the previous rate of 35%.

In 2005, the Bush administration had a similar “tax amnesty” when over 50 US firms sent back about $350 billion in profits earned overseas.   

In an interview last week, Mr Trump estimated that the total amount of US corporate profits on deposit offshore is between $3 and $5 trillion. 

This is a pretty wide spread. But considering that just 5 tech firms (Apple, Microsoft, Google, Cisco and Oracle) are estimated to be holding over $650 billion offshore, it’s clear that the repatriation numbers will be much higher than in 2005. 

In fact, Apple CEO, Tim Cook, announced that they intend to repatriate over $250 billion during 2018, which is over 70% of the 2005 total spread across 50 firms. 

The most obvious impact of this massive transfer of funds will be the boost in demand for US Dollars. The amnesty plan in 2005 triggered a 12% rally in the USD Index from 81.00 to over 90.00 from March to July.

However, with some EU and Japanese banks already teetering from bad debts and non-performing loans, the short-term implications could be devastating to the banks that have been holding the cash that Mr Trump wants back.

We believe that with just one company like Apple draining $20 billion a month from the European banking system, there will be a negative impact on the health of many EU banks.

At this point we don’t have any clear numbers reflecting the amount of money being held in Australian banks, but we would expect the general strengthening of the USD, on a global basis, will see the AUD/USD retreat back into the lower .7000 handle.

ASX listed stocks which will benefit from the lower Aussie dollar include RHC, QAN, TWE, RIO and NCM.

Aussie Dollar

 

  

 

 

 

 

 

 

 

 

 

 

AUD Boosted By Last Week’s M&A Activity

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Last week’s Merger and Acquisition activity was a key driver in the Aussie dollar’s move from .7510 to .7690.

Tuesday’s Westfield deal for AUD 32 billion combined with Zurich’s announcement that it will buy ANZ’s life insurance business for AUD 2.85 gave the local currency a bid tone for the week.

All together, the flow was about $9 billion of AUD/USD that needed to be bought to cover the hedging aspect of the M&A transactions. This was enough to push the AUD/USD to .7690 before offers capped the move.

With this buying support absorbed into the market, the technical picture in the AUD/USD looks to be weakening with the longer-term down trend the path of least resistance.

We see the next area of support in the .7565 area. A break of the December 11th low at .7510 could trigger a quick move back to the .7300 handle.

Some of the ASX stocks that would benefit from a lower AUD include: RHC, NCM, QAN and TWE.

Ramsay Health

Newcrest Mining

QANTAS

Treasury Wine Estates

 

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

 

ALGO Update: QAN Shares Are Regaining Altitude

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Our ALGO engine triggered a buy signal in QAN last Friday at 5.60.

Since posting a 52-week high at $6.53 on October 18th, QAN shares have traded down to a low of $5.57 last Thursday.

Technically, the share price is still tracking a “higher low” pattern which is bullish and suggests the recent sell off is a correction within a broader uptrend.

the company is currently trading on a P/E of 13X and will likely improve on the FY 17 after tax profit of $853 million announced back in October.

QAN is also one of the ASX companies that will benefit from a weaker Aussie Dollar as inbound tourism is likely to increase.

Over the near-term we are looking the share price to reach the $6.25 area.

 

QANTAS

 

Boeing And Qantas

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Shares of aerospace giant Boeing dropped more 3% after reporting lower revenue numbers in both its commercial aircraft and defense industry units.

The company’s EPS rose to $2.72 per share compared to expectations of $2.66, and revenue was announced at $24.3 billion versus expectations of $23.9 billion.

Boeing also announced that they paid over $2.5 billion to repurchase 11 million shares, which leaves $6.5 billion in its buyback program.

Based on the daily charts, the next relevant support level is near $205.00.

Keeping with the aviation theme, shares of QAN opened 6% lower after CEO Alan Joyce warned that Q2 revenue is likely to slow compared to Q2 last year.

After posting a low of $5.94, shares have rebounded as the details of the current report are supporting new buying.

The company said underlying profits before tax were close to $900 million, and international revenue rose .2% compared to a 6.9% loss in the year-ago quarter.

We had an ALGO engine buy signal on QAN on July 24th at $5.25. We consider QAN a “hold” at these levels and see resistance in the $6.75 area.

Boeing

 

QANTAS

QANTAS: Share Price Reaches High Altitude

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Shares of Qantas reached a 10-year high of $5.90 on Friday as investors respond to several broker valuation upgrades and the rumor of a credit rating upgrade from Moody’s investor services.

One of the reports forecast a target of $7.09 with an expected dividend of 15 cents per share, which would be more than double the 7 cents per share posted in FY 2016.

With internal momentum indicators now in overbought territory, we suggest a price reversion lower over the short-term. We will watch the ALGO engine for new signals and expect initial support in the $5.15 area.

QANTAS