Viewpoint: Bullish
Chemicals business IPL rallied over 4% yesterday and now looks poised to breakout to fresh multi-year highs in the coming weeks – a 20% gain before Christmas would not surprise. The market has clearly embraced the fertiliser manufacturers strong 2nd half performance and as so often occurs companies that report well outperform over both the following days and months.
WHC rallied 2.65% on Thursday following approval for its Vickery mine extension but after making fresh 2-year highs the stock did surrender over half of the days early gains – we remain bullish WHC but it feels like a few weeks profit taking is close at hand following its 50% appreciation in just a few quick weeks.
CSR caught our attention yesterday after it broke out to fresh 14-week highs as it rode a wave of optimism towards the buildings stocks. We like CSR both fundamentally and technically with our initial target up towards the $7 region – the company is forecast to pay an attractive fully franked dividend in late November which should help this outlook.
The ASX200 rallied strongly yesterday as it enjoyed broad-based buying, by 4pm 60% of the index had closed in positive territory with the Energy Sector again best on ground following the strong rally by crude oil. Outside of iron ore names which have seen the likes of Fortescue Metals Group tumble 35% in just 8-weeks, although it did pay a major dividend on route, the broad…
In Wednesdays Portfolio Positioning Report we illustrated the logic behind our bullish stance towards global energy names into 2022 with the disconnect between the underlying crude price and oil stocks feeling like it’s become way too stretched even if we are seeing a strong ESG move by mandated fund managers.
Overnight crude oil advanced another 2.9% to withing striking distance of fresh multi-year highs. The Energy Sector hasn’t been a believer in the underlying commodities rally in 2021 but we feel the 18% advance in just 4-weeks should become too much for investors to ignore.
PLS followed our roadmap yesterday by popping to fresh all-time highs as the lithium miner enjoyed prices 6x higher than the early 2020 lows – in the same time the stock has rallied around 400%. If we are correct the lithium miner should now enter a period of consolidation prior to further gains but this is the highest risk part of the call as the trend…
WTC caught my attention yesterday as it led the line for the tech names rallying over 3% to fresh September highs. The stock looks to have finished an understandable “rest” after exploding higher post its FY21 result in August which showed revenue had increased 18% to well over $500m while guidance was exceptional. While WTC is highly priced, the momentum…
Australian 3-year bond yields dipped under 0.2% yesterday and are threatening to test multi-month lows. With the RBA looking to anchor yields to 0.1% until 2024 we may see bonds tread water for a while but its our view that the next move is up unless the economy surprises MM and slips back into a recession. From a risk / reward perspective we are an…
The ASX200 slipped 20-points lower on Wednesday primarily because the index is more heavily weighted towards the value, as opposed to growth stocks i.e. banks and resources. Fortunately a strong performance from the Healthcare & IT stocks stemmed the losses as the market continued to embrace Tuesday’s dovish comments from the RBA.
