Local Stocks Fail to follow the Global Bullish Lead
Following yesterday’s strong performance, the ASX200 looked nicely positioned this morning following a 152-point rally by the Dow but alas, it was not to be. It didn’t help that selling hit our market from the open, but yet another downgrade by QBE Insurance (QBE) who were hit by further natural disaster claims is now shaping up to be their costliest year in history – an operating loss is looming. The futures market fell almost 60-points from the opening as the anticipated early strength in stocks did not materialise and the market finally closed down 28 points / -0.49% with a range of +/- 43 points, a high of 5736 and a low of 5692 - led by the banking, insurance and energy sectors.
Around 10am, MM sent out an alert to take profit on half of our CYBG Plc (CYB) position at $5.30, or higher, unfortunately this was not filled with CYB’s intraday high of $5.27 falling short of our sell zone. We will leave the order in the market for the next few days and revaluate if unfilled by the weekend.
The MM Growth Portfolio is currently holding 20% in cash and we’re happy to buy weakness in a select few stocks, but as we said in the morning report, we do not believe this in the time to chase strength. We continue to believe a 5% correction is close at hand for US stocks, which is likely to provide better entry levels on the local market.
ASX 200 intraday Chart
ASX 200 Daily Chart
1 CYBG Plc (CYB) $5.20
We remain overall bullish CYB, but are comfortable taking profit on 50% of our position at our initial target around the $5.30 level, at this stage we do not envisage lowering our sell level.
*Watch for alerts.
CYBG Plc (CYB) Weekly Chart
2 QBE Insurance (QBE) $9.75
QBE was one of the markets worst performers today, falling over 4% following the companies increased catastrophic claims allowance due to the recent hurricanes in the US. Today’s plunge has brought the stock back into the value area as the company cleans the decks for the new CEO. We would be looking to add at current levels due to our bullish outlook for US interest rates, but our 7% holding is definitely enough in the current environment.
QBE Insurance (QBE) Monthly Chart
3 Regis Resources (RRL) $3.63
We have had RRL on our radar for a while, but feel comfortable remaining on the sidelines at present, the downside momentum simply feels too strong.
*Watch for alerts.
Regis Resources (RLL) Weekly Chart
Have a great night
The Market Matters Team
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