Australian Investment Blog

Good morning everyone Overview This month the ASX200 is up 1.8% whereas the large supermarkets are up an impressive 4.6%! But it is a tale of very different performance when we look closer. Market Matters are a market leading advisory service, to subscribe to their free newsletter click here Turning to the markets Focusing on the two big players in the sector we can see that Wesfarmers (WES) is up 10.3% but Woolworths is actually down 1.1% over the same time which poses a few questions e.g. Is Woolworths poised to catch up or does it remain in trouble. Market Matters recommended selling WOW when it was ~$34, prior to the majority of its 43% fall, using the UK market as a leading indicator. When we look at the large UK supermarkets like Tesco and Sainsbury's we have seen minor bounces in recent weeks but clearly no change to the negative trend. While in the short term Tesco looks set for a further 10% bounce following its massive 72% collapse, the technical indicator is a trading opportunity not an investment signal. Market Matters are a market leading advisory service, to subscribe to their free newsletter click here Let’s move on and focus on WES and WOW individually. Wesfarmers (WES) $43.78 WES has been a strong performer this month enjoying the disruption within its main competitor to Bunnings. Technically WES looks set to make fresh all-time highs over $47 as it appears destined to receive any money allocated to the sector. Market Matters are a market leading advisory service, to subscribe to their free newsletter click here Woolworths (WOW) $23.10 WOW has been languishing since early 2014 as margins have come under intense pressure from overseas competitors entering our market e.g. ALDI. Technically, the stock has reached our target area but, similar to the UK supermarkets, there have been no buy signals generated.