Resources hit as US Dollar firms + China data weak…
What Mattered Today
The market opened down smalls and tread water until weaker than expected trade data from China + a weak open on the US FUTURES got the sellers active and we saw the market trade down as much as -54pts before a tepid recovery into the close. We had a range today of +/- 48 points, a high of 5468, a low of 5420 and a close of 5435, off -39pts or -0.71%. Volume was good today and it seems we’re back into the swing of it post school holidays.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Resources; Came off today as a strengthening $US and weaker than expected Chinese trade balance of +278B v 365B expected was enough to prompt some profit-taking amongst the miners. We also had Citi join UBS in their call to reduce exposure to miners downgrading both BHP and RIO – both are now on a SELL…BHP was off -2.94% to $22.75 while Rio Tinto (RIO) gave back -2.70% to close at $51.57.
For aggressive traders out there Fortescue Metals (FMG) looks like a short (going down) given its failure to punch through the $5.20 region on three separate occasions before rolling over today…A pullback seems inevitable from here. We’ll shortly be introducing more active trading ideas through the Market Matters subscription service and benefitting from downside moves will certainly feature. Stay tuned.
BHP Billiton (BHP) Daily Chart
Fortescue Metals (FMG) daily chart
Elsewhere, Transurban (TCL) released reasonable traffic numbers + a good set of revenue figures which pushed the stock up slightly (+0.38% to $10.66) however we continue to think these yield stocks will remain under pressure – even if they bounce short term. Vocus (VOC) finally had a day in the sun as talk of a potential Share buy-back got the buyers back out in force with the stock rallying +5.46% to close at $5.79 – after being as low at $5.25 at the depths of despair yesterday morning.
The key here is earnings and whether or not recent uncertainty in management/board has impacted focus and the momentum of the business. We won’t know until the end of Nov at their AGM however, as we’ve said numerous times, they only reported about 6 weeks ago, offering fairly upbeat guidance so it seems unlikely that there would have been any meaningful deterioration from that point to now.
Vocus Communications (VOC) Daily Chart
Mantra (MTR) held their AGM today and the stock put on +2.85% to close at $3.25. This is a stock we hold on the MM portfolio – bought it recently and it's bouncing along the bottom. $2.87 low seems a meaningful one, however, any upside momentum has been snuffed out in recent times. We like it fundamentally + technically and are pleased today from the companies rhetoric at their AGM.
Mantra Group (MTR) Daily Chart
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What Matters Overseas
FUTURES down….
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