Viewpoint: Bullish
MM has mentioned the improving allure of defensive stocks over recent weeks and the gains by the likes of WOW and Collins Foods (CKF) yesterday when the market was being smacked caught my attention.
DXS +1.76%: one we hold in the Income Portfolio, Dexus made a move on property fund manager APN (APD) today.
FMG looks destined to make fresh all-time highs towards the $27-28 area but we would be inclined to fade this move. FMG was our “Chart of Week” a few weeks back.
BHP trades in the US, UK and Australia hence we generally have a very good indication where it’s likely to open every morning.
The VIX index showed how easily it can rally back above 20 last week when stocks dip on the downside but again when they recover the path of least resistance is down. MM believes this is the time to be laying traps for a spike up towards 30 for the VIX.
Lastly precious metals that have started to rally over recent weeks with gold already close to 10% above its 2021 low.
US 10-year bond yields are the focus of the world when it comes to interest rates and Fridays US Jobs Data showed a clear picture that a shortage of workers and raw materials was causing issues for the governments heavily stimulated economic recovery.
US based SZL looks similar to the previous names although a lot less volatile than APT & Z1P. We like SZL into fresh 2021 lows which again cannot be ruled out in this volatile sector.
OPY is correcting in a far more gradual and constructive manner, technically the stock looks to already be in an ideal zone to accumulate although it’s going to be a big ask to rally significantly in an environment where tech is struggling.
In the past rising bond yields has worried the high growth / high valuation names such as IT with both 2018 and this year standout examples.
