Viewpoint: Bullish
The market sentiment indicators are providing us with little solace as contradiction abounds around every corner e.g. the Put / Call ratio is back around 20-year lows but the VIX continues to fail every time it pokes its head out into the sunlight above the psychological 20 area.
No change, bond yields continue to tread water after a strong 2021 gains, our preference is they will continue to drift lower and we actually feel they will probably take out the lows of April creating a washout move to the downside – if this does unfold MM will look to gain exposure through an ETF targeting rising yields through 2022.
We touched on QBE in late April when the stock was ~$9.50 at the time MM was targeting around 20% upside citing rising bond yields as the driving force.
MM bought into HUB’s pullback in early April, being human we missed the low but the stocks started to rally nicely this week as we were anticipating from this quality operation, we remain bullish with an initial target ~15% higher.
Technology One (TNE) is an Australian-based company that is engaged in the development, marketing, sales, implementation, support, and distribution of financial management and enterprise software solutions.
BEN is a bank which certainly likes to spike higher on news, last February it surged higher following its half-year result but things tend to calm down fairly quickly afterwards, the stocks actually fallen more than 3% during the last month leaving us more comfortable as observers at least short-term.
BOQ is the only bank in the ASX200 to have fallen over the last 3-months albeit only -1.8%. Hence at this stage we have no interest in the regional bank but ~10% lower it will become interesting.
ANZ has lagged Westpac in 2021 but at the right price it still could be an option to increasing our sector exposure. From a risk / reward perspective the stock’s in “no mans land” to us at present with a $26-$30 trading range slowly evolving.
The other members of the illustrious large banking club are all painting a fairly similar picture, the uptrend is maturing but MM is a far happier buyer of pullbacks as opposed to a seller of strength.
