Month: May 2015
With the ASX200 sitting within 1% of last Friday’s close, I thought it would be interesting to focus on a few stocks that have bucked the trend and moved over the last 5 trading days. The below winners / losers clearly illustrates two very important points with investing:
• The ASX 200 jumped early from its barrier today, trading as high as 5803, on the last trading day of the month and ending 64 points higher (1.1%) at 5777 for the day, only 13 points lower for the month of May!• The Financial Sector was the strongest, up 1.5%, with Commonwealth Bank (CBA) up $1.59 (1.90%) to $85.09 after a high of $85.82, Australia New Zealand Bank (ANZ) up 47c (1.44%) to $33.19, National Australia Bank (NAB) up 88c (2.63%) to $34.32 and Westpac (WBC) up 44c (1.33%) to $33.56. • The Iron Ore and ‘Telco’ Sector also enjoyed a good day. BHP Billiton (BHP) was up 39c (1.34%) to $29.59 and Rio Tinto (RIO) was up 55c to (0.95%) to $58.20. Meanwhile on the Telco’s Telstra finished up 7c (1.14%) to $6.22, TPG Telecommunications (TPM) up 11c (1.23%) to $9.04 and Vocus (VOC) up 11c to $1.92.• The Market truly felt like window dressing today, the last trading day of May.• Please see the Hickman Report tomorrow.
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• A disappointing day, not managing to follow through on the strength in the US overnight, as the Futures market sold aggressively in the first few hours. The ASX 200 closed 12 points lower (-0.2%) at 5713.• Apart from ANZ outperforming the market, the remaining big 3 banks led Australia’s benchmark lower, with Commonwealth Bank (CBA) being the weakest link, down 63c (-0.8%) lower at $83.50 which dovetails with our view to start accumulating this stock soon.• Poor economic data continues to be released, showing our underperformance against other global economies, particularly the US. The 1Q15 Capital Expenditure was reported far weaker than expected, further confirming Australia’s poor economic health at present.• The gold sector didn’t follow through from overnight’s strength in the physical commodity. Newcrest (NCM) lost 5.4% at $13.90. We currently see better risk/reward elsewhere.
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• After a weak lead from overseas, our market started the day lower and continued to fall from there. The ASX 200 finished the day down 48 points (-0.8%) to 5725, erasing most of yesterday’s gain.• The momentum to the downside increased after the first numbers of the day. The Construction Work done q/q was down -2.4% on a forecast number of -1.5%.• The Consumer Staples sector was the weakest in today’s market. Woolworths (WOW) was down 59c (2.1%) to $27.94, Wesfarmers (WES) down 68c (-1.5%) to $43.40, and Treasury Wine Estates (TWE) down 17c (3.2%) to $5.20. • The resource sector also led the bear charging south. BHP Billiton (BHP) closed 48c lower (-1.6%) at $29.34 and RIO Tinto (RIO) -98c (-1.7%) at $57.31.
With both the US and UK markets closed last night, I thought I would take the different step of looking at a specific chart pattern. I use a number of factors in making investment / trading decisions including fundamentals, statistics and pattern recognition. A lot of people consider only one methodology, but why when they all have foundation?
• With expectation low after holidays in the U S, UK and Germany last night, we again had a pleasant surprise with the market again with risk surely back this week in the Australian Equities Market. The ASX 200 rallied 52 points higher to 5773 with plenty of corporate actions and mergers and acquisitions on the agenda.• With news that we did have, namely on oil up 17c (0.3%) to US$59.89/bbl and Iron Ore up 3.4% in Asia, it was enough to see a virtual across the board rise. • In the resources sector, Fortescue Metals (FMG) rallied as high as $2.50 before ending its session up 23c (+10.6%) at $2.40. The strength of this was mentioned in this morning’s report, despite FMG being not aware of any FIRB applications.• Of the Big 4 banks, Westpac (WBC) was the strongest link, rallying 69c (+2.1%) to $33.65 as investors turn optimistic of its group executive changes.• The utilities sector was the strongest of all today, heavily led by AGL Energy (AGL) – up 99c (+6.4%) at $16.47. This was after AGL announced its strategic roadmap, outlining targets of $1Bn in asset sales by FY17. AGL remains in a neutral pattern and see better risk/reward elsewhere.
Significant Volatility may be just over the horizon
• Another quiet and choppy session was experienced by the ASX 200 today as was expected with both the US and UK markets closed tonight. The market jumped from the gates trading on its day’s high of 5733 around midday, only to lose some from the afternoon and close 57 points higher at 5722. Technically, the ASX200 has reached our short term target on the upside; from here we see good risk reward in the negative territory.• The banking sector finally trading positive supported the broader market; Westpac (WBC) closed 40c higher (+1.2%) at $32.96 and Commonwealth Bank (CBA) up 89c (+1.1%) at $84.00. As mentioned in the Hickman Report, we are happy to start and accumulate CBA back near the $81 area.• In the Merger & Acquisition (M&A) front, nickel and copper explorer, Independence Group (IGO) entered a takeover bid in Sirius Resources (SIR) via cash and shares. SIR closed 20.4% higher at $3.90.
Really bullish, there's more to go in the reflation rally
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