Australian Investment Blog

Earlier in the week Market Matters made the aggressive call to switch Macquarie Group (MQG) into BHP Billiton (BHP), a stock that has fallen over 30% in the last year - see chart 1. A quick summary of the logic was that BHP looks technically in a support region from where it can bounce over $4 (~2%) and MQG had reached our target of fresh 2015 highs at the end of October - see chart 2.

Interestingly a number of subscribers raised the excellent question "why sell the outperformer MQG and not the struggling BEN?" - nobody doubted the BHP call!!

Generally, Market Matters prefers to ride the strength; as we have previously discussed following the trend statistically has a better strike rate.