WARNING: This is an automatic computer generated transcript. The computer makes some mistakes in its translation and therefore this is NOT 100% accurate. Use as a Quick Reference Guide Only and double check your understanding against your own analysis. Consult your broker or financial adviser before making any investment or trading decisions.
Welcome to THE AUSTRALIAN SHARES REPORT ASX Friday July 15 2016.
The US stock market has been stronger.
The German Dax got close to the target area that I said it should be into a sell zone.
Recently we have had some reports that there’s been a bit of terrorist activity around France.
I don’t know whether that will actually have an effect on the stock market but one effect on the stock market, you would think, should be a little bit disturbing would be the fact that the British central bank, the Bank of England, did not lower interest rates like the whole world expected.
Japan of course has appeared to be doing some more qualitative easing.
The NASDAQ went to new highs last night, the S&P did, the Dow did and they’ve reached some ratios but there’s nothing to say that these things have topped.
The Australian stock market has gotten close to where would we think it should be topping out but not quite yet.
XAO.ASX
We missed out on the target that I’ve been giving by approximately 8 points and I would suggest this is as good a time as any to drop our equity allocation by another 1%.
Currently the XAO.ASX is at the 5510 on the open.
Let’s drop it by 2% and we will sell out and go to cash completely on a break below 5400.
XJO.ASX
This is a short on a break below 5340.
Stoploss above 5440 targeting 5276, 5039 and in my dreams 4219.
XFJ.ASX Financials Index
I would like this on a close above 6000 and I would not like it on a close below 5878.
There is something inherently untrustworthy I think in a lot of the financial markets at the moment.
ANZ.ASX
Investors timeframe:
No change to the analysis whatsoever.
Intermediate timeframe:
We see clearly that this week has shared, so far, Similar characteristics to the previous week which was decreasing volatility.
Now remember it is Friday and Fridays often are square up day.
This is where traders who have been long, because they were bullish on Monday, start to take profit because they do not want to have any exposure by the end of the week and don’t want to risk going in if the US changes things.
So currently we see the weekly volume is not that great and it will be interesting to see whether the short-term traders really dominated this rally.
If you are long, have your stoploss at $24.
CBA.ASX
Investors timeframe:
No change to the analysis.
Intermediate timeframe:
We see that it has gotten up to the rally point around since $76 and the fat controller now determines whether it can drop down to $74.76.
So I know Richard was a little bit worried about buying CBA and that certainly worked out profitably for him.
If you wanted to have a stoploss, that would be at $74.75
NAB.ASX
Investors timeframe:
No change to the analysis on the investors timeframe.
Intermediate timeframe:
Not even making the fat controller on this, so NAB is still in a weak position so don’t be long if it breaks down below $25.
WBC.ASX Westpac
Investors timeframe:
No change to the analysis.
Intermediate timeframe:
We can see a nice little rally happening on the weekly charts and it’s at $30 right now which has been little bit of a problem.
It may go as far as $30.45 but that’s about it.
XMJ.ASX
The materials index is having a bit of a breather over the past couple days.
The US BHP and RIO didn’t really do much, they were a little bit confused last night as well.
So maybe we expect a pullback down to 8582.
BHP.ASX
Investors timeframe:
We have seen a new high broken for the month which is somewhat positive.
And so if you are long, stop should be at $18.54.
We still may be getting that $21.79 target I have been hoping for for quite some time.
I still also hope for $9 as well.
Intermediate timeframe:
We can see it walking its’ way into the negative cloud on somewhat decreasing volume.
We see that it has a bit of life until the end of August usually and then it starts to decline.
So BHP is okay to be playing with.
You would need a stoploss below $19.70 if you are playing with this on the intermediate timeframe.
Target $21.
RIO.ASX
Investors timeframe:
I’d been talking about over $50 but hoping that it would be rejected from $50.
A little bit of a conflict of interest there, we still have $52.15 as a possibility.
Intermediate timeframe:
The top of the negative cloud is at $52 and volume has been decreasing as price has been increasing so we are hoping for it to run out of steam soon.
Cycle wise it also says it probably will run out of steam soon too.
We also noticed that iron ore has kind of popped a little bit, or at least pulled back from where it was.
XEJ.ASX
The energies index is holding up remarkably well for something where its underlying commodities have not behaved very well over the last few days.
I won’t like this much below 8190.
And it does seem to have a little bit of a negative event for the next couple weeks.
So tighten your stoploss is in the energies complex.
OSH.ASX Oil Search
Investors timeframe:
This is still boring.
Needs a break above $7.30 with a stoploss at $6.83 if you are buying hoping for around about $8.36.
However at this point in our lives I don’t think that’s going to be happening.
Intermediate timeframe:
On this timeframe buy a break above $7.15 with a stoploss below $6.72.
XGD.ASX
Investors timeframe:
It’s popped its’ head through the top of the negative cloud, as I said on Wednesday, and a break back down through it would be disturbing, that would be below 5050.
RMS.ASX Ramelius Resources
Investors timeframe:
We see it in the negative cloud.
Which means it could easily drop back down $.39 and still be going up towards $.83.
Intermediate timeframe:
A pull back down to $.49 is plausible but not likely.
More churning sideways is probably more likely.
A dip into the week of 5 August would be reasonable to expect.
Cindy is telling me that the XGD is now below my 5379 short-term sell signal, so if you want to reduce positions in gold stocks you may do so, but if you’re holding them from a lot lower down, don’t do a lot because you’re probably going to get out and regret it at the stage when it turns around again.
XHJ.ASX
A breakdown below 21,450 would be negative, but at the moment life still goes on for the healthcare index.
It’s quite nice to see that in Indonesia we can buy Australian made drugs for one quarter of the price that we pay for them in Australia.
We did that yesterday, I needed something and I walked in didn’t need a prescription and only paid a quarter of the price for what they are normally in Australia.
RHC.ASX
Investor’s timeframe:
We still have a target at $77.45 for Ramsey Healthcare.
Stoploss is at $69.12 if long.
Intermediate timeframe:
Stoploss is at $70.60 if long.
XTJ.ASX
Currently the telecoms index is having a little bit of a rest.
The best thing I could say is 2091 would be a warning signal and maybe 2125 is a place where you could bank some cash.
VOC.ASX Vocus
Investors timeframe:
It’s had a couple of months of nice decline followed by somewhat of a reversal.
It may still want to go to $7.93 though that should still be possible.
Intermediate timeframe:
We can see yes it’s drop down and it’s bounced off a bit of support on this timeframe and it may go back up towards about $8.80 but still be in a churning motion.
TLS.ASX
Investors timeframe:
Heading towards that $5.84 area.
Stoploss if long, $5.45.
Intermediate timeframe:
I’d say this is probably going to have trouble at that $5.80 to $5.90 area.
If you are long it might be a great place to be banking some cash there before it may fall off a cliff after the end of July.
Possibly that’s when it pays dividends in August.
XPJ.ASX Property Index
US 30 year bonds and 10 year bonds in Australian bonds are coming back a lot harder than I had imagined and the property index is suffering from that.
I can’t say pull your head in yet but I can say be cautious about buying too much.
GPT.ASX
Investors timeframe:
With half the month down we don’t see as much volume as it should, so we are probably in an intermediate timeframe correction.
Intermediate timeframe:
If you are long, have a stoploss below $5.36 on this timeframe.
It may risk, now that it’s done it’s 5th wave of sorts, a pullback down to $5.04.
XSO.ASX Small Ordinaries Index
It’s momentum has slowed down and a pullback down to either 2396 or 2384 would be normal.
TOP 100 STOCKS
AMC.ASX
Investors timeframe:
having a little bit of a heavy couple of months and the churning pattern breaking down below $14.24.
Intermediate timeframe:
Intermediate timeframe having a pullback on decreasing volume so it’s a little bit suspicious.
It may go back up towards our $15.82 visitation rights at $14.54.
CYB.ASX Clydesdale Bank
Investors timeframe:
As mentioned previously, it was kind of a bargain down at $3.80 and $3.60 because it was near where it was floated.
From now on, with the $2 range in the first 6 months of its’ life, you would expect it to play within that $2 range within the next 12 to 18 months.
So buy dips down to $3.60 to $3.80 and sell rallies up to $5.40 to $5.80.
Intermediate timeframe:
Buy a close above $4.20 looking for $4.72.
The stoploss, if it happens, is at $3.95.
REA.ASX
Investors timeframe:
I read somewhere somebody was saying real estate.com should takeover News Corporation or something like that.
I don’t know whether that was ‘tongue-in-cheek’, but certainly the stock market is standing up and being counted.
If you are long, have your stoploss at $55.
Intermediate timeframe:
Stoploss below $60.
Normally this is a time of year where it is weak.
So normal is not normal anymore.
Volume is also not good on this.
So if you wanted to have a wider stoploss, run it at $58.34.
RMD.ASX
Investors timeframe:
It’s been rallying on decreasing volume so it’s a little bit suspicious.
And it’s also reached some targets and I think not quite there, had a little bit higher on that target at $8.70.
Anyway regardless of whatever price it was, it’s close but no cigar.
Stoploss if Long is at $8.24.
Intermediate timeframe:
We can see a Christmas tree effect, so if you want to short RMD.ASX it’s probably okay on a breakdown below $8.30.
Your stoploss would be above $8.70 targeting 1st $7.88 and next $7.64.
SMALL AND MID CAP STOCKS
GXY.ASX
Investors timeframe:
Still has the potential for $.64.
Dips to buy to $.42.
Stoploss below $.38.
Intermediate timeframe:
Volume is quite high for the breakdown.
So maybe it’s looking down towards that $41 to $.42, maybe even $.37 retracement.
I think you don’t need to be in a lot of hurry to buy this unless it breaks above $.53.
A2M.ASX
Investors timeframe:
This has a potential to achieve that $1.95 and the potential to achieve $1.19.
At the moment we’re targeting $1.95.
If you are long on this timeframe, have your stoploss at $1.63.
Intermediate timeframe:
Targeting $1.91.
Stoploss is at $1.78.
If it blows through $1.98, expect $2.09.
LIT.ASX Lithium
Investors timeframe:
Currently in some sort of churning, burning investors timeframe land and in the shorter term, look to buy dips to $.28 or $.25 with a stoploss below $.23.
Intermediate timeframe:
It jumped off on some good volume but didn’t get clear of the old resistance.
So again what I just said above is appropriate.
Don’t get too excited about this but may be have a nibble at $.28 with a stoploss at $.27.
