Morning Report Monday 28 July 2014
The Insurance sector breaks out to fresh 5 year highs - Has the horse bolted?
Two of the local four major insurance stocks broke out to fresh 5-year highs last week and this morning, the AFR Street Talk section leads with “Recovering AMP viewed as a takeover target” - all adding to a currently hot sector. My view is that the market is simply late following our call of a few months ago to sell / reduce banks and buy Insurance Australia / Suncorp. At present, I have to go with my view on the sector of the previous 6 months and unfortunately that is becoming negative at current levels leading with Suncorp reaching my target area. My comfort level in taking profit this month in Suncorp is aided by the feeling that the insurance stocks are being driven up by some money from bank stocks.
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