Market Matters Afternoon Report Friday 16th September 2016
Good Afternoon everyone
What Mattered Today
A good bounce in the Aussie market today with the banks once again seeing some reasonable buying. CBA, NAB & ANZ the main drivers while WBC lagged – but only slightly. Telstra (TLS) was also good today adding another +1.59% to close at $5.10 while some of the recent laggards – namely Mantra (MTR), Estia Health (EHE) and Blackmores (BKL) also had a good session – all bouncing from oversold levels.
On the index today we had a range of +/-61 points, a high of 5306, a low of 5245 and a close of 5296, up +56 points or +1.08%
ASX 200 Intra-day chart
ASX 200 Daily Chart
We sold one of our energy holdings today – Woodside (WPL) – more a result of the desire to increase our reasonably low cash levels but also because it was showing a slight profit after accruing the dividend. Higher cash levels giving us more flexibility and as we’ve learnt over many years in the market, flexibility and an open mind remain one of the keys to investment success over the longer term. Investing in the stock market over and above property means we’re liquid – and can increase/decrease cash levels fairly easily. That’s primarily what we’ve done today.
As subscribers know, we trade real money in the market daily, we’re not theoretical as many are, and we wear our heart on our sleeve. We live and die by our calls and at times they’ll simply be wrong . Market Matters isn’t for everyone – we realise at times we can be an acquired taste, but the most important aspect in our minds, the real basis for why we write reports and communicate with our subscribers, is to call it as it is. The good, the frustrating, the bad and the confusing. When a week comes to an end we often reflect. It’s been a tough one – not doubt about it – but we’ve had many weeks like it in the past. If making money from the stock market consistently was easy, we suspect they’d be very few people reading this report today. That said, we’ve got a very good track record – which you can see here - and we’ll continue to put our views on the line!
In terms of Woodside (WPL), here’s some of what we wrote to subscribers today…
The market has moved up from recent lows – with the ASX 200 trading ~5300. Given our low cash levels in the Market Matters portfolio, we suggest selling Woodside (WPL) around $27.50. The position was originally purchased at $27.70 and we have accrued a 34c dividend.
We have Origin Energy (ORG) in the portfolio which will provide a more leveraged exposure to the Oil price and we are reticent to reduce our overweight holding in the banks. Elsewhere, Vocus Communications (VOC) seems to have found some support around $7.00 and has started moving higher. Independence Group (IGO) has been volatile – however, again, we see reasonable price support around $3.50 while CSL is clearly oversold after a tough few weeks.
As a result, we suggest increasing cash levels by selling our 7.5% position in Woodside (WPL) to increase cash weighting to 11%. Higher cash levels give us more flexibility to deal with the volatility likely in the weeks/months ahead.
Woodside (WPL) Daily Chart
Sectors…clearly all sectors in the black today which is a foreign theme in recent times….
ASX 200 Movers
Select Economic Data - Stuff that really Matters in Green
What Matters Overseas
FUTURES lower – but only marginally
***Keep an eye out for the weekend report on Sunday***
All figures contained from sources believed to be accurate. Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. Prices as at 16/09/2016. 5:00PM.
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