Monday, February 22, 2010

Euro Update


The accumulation that I flagged last week in the Index Report in the currency still appears to be going on. The present pattern that we have seen over the last week is one of exhaustion and the failure to reach down to the 1.3300 level during the last week is another indication that the Euro is oversold in the short term. With the performance and movement of Cable over the last week we could be seeing a switching out of being short the Euro into being short Cable. I would be cautious about being short at the moment.



Saturday, February 20, 2010

QBE Insurance Update and View


QBE Insurance has been in a consolidation pattern for the last 4 months like the rest of the market. The stock is presently poised and is in an inverse head and shoulder pattern.

A break of Fridays high should see the neckline nicely broken on this inverse head and shoulders pattern and potentially target somewhere towards the $25.00 level.

The stock is currently trading on a attractive yield of 5.44% and with a price to earnings on just under 11 times the stock is not expensive compared to historicals.

Its something to watch closely over the next couple of weeks.


Friday, February 19, 2010

FTSE Index Update


We have had the FTSE break both the recent downtrends over the last 2 weeks and with the current higher high and the bounce from the 200 day moving average, it appears that the UK Index is now on the road for another run north over the coming weeks and months.

The 5 wave structure is the same as the ASX200 that I flagged earlier in the week. We are presently at a cross roads with the indexes. We could either see a retracement back to roughly 50% of the recent move up before going long again, forming an inverse head and shoulders pattern and then giving us a target just to the outside of the top of the trading range that we have been in for the last 4 months, or we could have a strong acceleration out of this pattern as short covering and new money flood into the markets.

Something to watch very strongly over the course of the next week or so.

Tuesday, February 16, 2010

ASX200 Index Update



The ASX200 Index has been waning of late and a lot of commentators are looking for lower prices, myself included up until recently.

The price action over the last couple of weeks has been struggling to go lower. Looking to the chart for the XJO we can see an inverted head and shoulders pattern marking the end of the downward movement. The market in June/June then broke the neckline and put in a target higher than it should have been. The period since September has been trading sideways and not really doing anything. For those of you that follow Elliot Wave theory, there are certain rules that the market is following at the moment. Wave 3 is typically the longest wave, but cannot be the shortest, and as wave 3 is clearly longer than Wave 1 this saying holds true. One of the other rules is that out of Waves 2 & 4, if one is a simple wave then the other must be complex. Wave 2 was simple due to the short sharp nature of the retracement, and wave 4 is complex due to the time taken and volatility during that time. Based on the pattern, the target for a wave 5 would be somewhere about 5400 or so. This coincides nicely with the fibonnaci targets as well.

So be wary of being too short this market at the moment.

Monday, February 15, 2010

Australian Stock Exchange - Company Update and View


Australian Stock Exchange has underperformed most of the other financial on the ASX200 over the last 12 months. It has fallen out of favour along with most of the other global exchanges.

The present yield and the near monopoly position that it enjoys makes it worthy of having a good look at it.

The present technical chart on the stock is very interesting. After such a protracted downleg and the consolidation that the stock has been subject too, a move above the $37.00 to $38.00 level could set it up for a very solid run over the course of the next 12 months. The solid consolidation basing pattern is a very good sign for the stock going forward.


Friday, February 12, 2010

National Australia Bank - Company Update and View



National Australia Bank has been held back recently against all the other banks due to it recent attempt to takeover of AXA.

There is strong dividend yield at present being at 5.92% fully franked and a very attractive Price to earnings of 9.39 times. The business is cheap on a global basis and Australian Banks are listed in the top ten banks globally. The present market Cap of $51 Billion is larger than Citigroup.

The takeover of the wealth management business AXA is important for the bank long term due to the wealth management component that it will add to National Australia Bank's already growing wealth management business and will help diversify away from the margin squeeze in the lending area.

As per the attached chart the stock is attractive and is over sold in the short to medium term basis. It would not take a lot for the stock to turn around.


Dow Jones Update


Looking at the Dow Jones at the moment, it appears that exhaustion is starting to come in on the downside. I have thought that that markets were overdone on the long side for a while now and have been of the opinion that the market could be going lower. The lack of conviction with the downturn is turning into the possibility that this is nothing more than a consolidation pattern. The 200 period moving average that was strong resistance mid last year, now could have the ability to be strong support. The level of bearishness out there amongst traders suggests that a lot of people are already short. Unless we see some major changes in the index over the next couple of days we could see a break of the trendline and the market move to the longside to complete a fifth wave.



Thursday, February 11, 2010

Aristocrat Leisure - ALL

Aristocrat is still following the script. Fell today on greatly reduced volume. Something to watch very closely.


Telstra - Company Update and View


The market was unimpressed by Telstra's recent company results.

There were a number of factors here. The EBITDA was down by 0.3% to $5.32 Billion. Revenue for the six months ending 2008 was down by 2.8%.

The company said that it was experiencing "challenging market conditions". Revenue from traditional fixed line was down by $222 Million. Revenue from other businesses were down by $53 Million. Revenue from mobile services, how ever was growing strongly , up $145 Million.

The stock has been trading in a consolidation pattern now for over 12 months against the recent rally in the stock market. It has not enjoyed the upward momentum, that a lot of other stocks have enjoyed over the last 12 months. The stock is currently trading on a dividend yield of 8.26%, which is extremely attractive.

In my experience, when stocks start to pay yields that are self-funding then you tend to find that they have bottomed. When I talk about self-funding it means that the yield from the security is greater than what you can borrow funds for. I am not saying that the stock is ready to turn around and rocket to the moon, but it is attractive down here against other forms of investment yields such as term deposits and such.

Happy trading

Monday, February 8, 2010

All that glitters is Gold



We have had triangulation for the downside, the with the present creeping trend I would expect that it would fail to get below $1027.00. The present pattern is one of consolidation and is not a topping pattern in my opinion. There is a large flag forming that has been more than 5 months in the making. The target out of this flag pattern is between $1310.00 and $1344.00 an ounce. Something that I would not be short at the moment.

Friday, February 5, 2010

Aristocrat Leisure - ALL


Aristocrat Leisure looks to be bucking the trend of the rest of the index with some seriously nice patterns for the long side. Nice triangulation on the fibonnaci and was confirmed with the touch of the fibonnaci targets. The declining volume over the last 4 days while the stock struggles to go down anything close to the rest of the market is a good sign.


Bramble Industries - BXB


Brambles Industries looks pretty interesting at the moment. The fibonacci sequence has the potential if it can move above $6.90 for a decent move to the long side

Tuesday, February 2, 2010

Liquid Natural Gas up 5.5% overnight


As you know LNG is one of my most preferred commodities over the coming years. It was up strongly last night by over 5.5%.


Monday, February 1, 2010

Sensex Index - Indian Market


The Indian market, like most of the other asain indexes, has been in a better situation that the US Indexes. I would expect this to continue. The index has been consolidating since September and would expect these to outperform the US Indexes over the coming weeks and would expect a rebound in this index within the next couple of days. I will be looking for where this rebound retraces to before looking for a downside atrget and if that downside target will break the range. This index could move down by more than 10% before I would consider it to be in a bear trend.

Cable (British Pound) GBPUSD


Cable is still within the trading range and a break to the lower side of this trading range would target the 1.5200 level easily over the coming weeks with an eventual move towards the 1.4800 area. The level of support is very strong and would expect that it wouldn't break to the bottom of the channel the first time