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DAX Index Trade Alert – Set Take Profit Limit

The other day, I released a DAX Index Trade alert to take advantage of a possible move higher over the next two months after the massive collapse we have recently seen. With the European Central Bank meeting to discuss the economic environment and the US releasing some key economic data in the form of the non-farm payrolls, volatility will be high. I am looking to take advantage of this by setting a limit order to take profits at a higher level. Read the full Order Alert below:

DAX Take Profit Limit Order 03.9.15

May Take On It All – August

It’s been a while since I have updated everyone on everything from this side of the desk and we seem to be as settled in the new office as we possibly can be given everything the market has thrown at us this year. Given the amount of time that has passed since I last updated everyone, I thought I would provide my view on the current state of play along with outlining some of the things we have been doing and what is currently in play along with some ideas going forward.

With the issues in Greece dominating the early part of the northern hemisphere summer it now seems to have stopped making the headlines of every media outlet available. This has seen the Euro trade in a range between 1.0500 to 1.1500 against the USD. European equity markets took the news badly on any negative news but were also very quick to rebound on any sign of an agreement or turnaround in the market. The sell offs provided good buying opportunities and we did so by purchasing some DAX calls through issued trade alerts. All trades that have been recently executed can be seen in the Performance Report that can be downloaded through the Performance Page.

Post Greece, the market then shifted its focus to China and the Federal Reserve in the US. The swings on a daily basis on the Chinese equity markets were significant to say the least but this was to be expected given the massive run up we had seen – 69.84% gain from the lows made in February this year alone!

In the US all eyes are on the September FOMC meeting in anticipation of a possible rise in interest rates. We have seen the USD strengthen against most currencies, combined with commodity prices, QE in Japan and Europe all pointing to more strength in the USD. The big question remains as to how far can this go? If we look at the Australian dollar, we have weaker commodities, slowing demand in China and the RBA still on an easing bias so holidays in the US don’t look like they are going to get any cheaper any time soon. The AUDUSD in on course to touch 70 cents this year in my opinion. On the holiday front the only positive is the lower crude oil prices which is benefiting the airlines but doesn’t quite seem to have made its way to the petrol pump for our benefit. Fuel Prices are higher now that when oil was trading around $100/barrel! – explain to me how this works?!

Looking forward I still have a preference for US equities over domestic equities but having said that, we have done quite well locally but better offshore. Stocks such as CSL have pushed to new highs, The banks have been steady and the miners have been hammered. I have been issuing investment recommendations on the ASX200 and we have simply been buying dips in the index. To date we are doing well with this strategy as you can see in the Performance Report on the Performance Page. Timing has been everything but my core view remains that we should perform better in the second half of the year as compared to the first half. With regard to the US we have also been on the right side of the currency move so not only has it been a case of calling the direction of the equity markets but the currency gains have also improved the returns.

From here, I continue to favour health care, technology, pharmaceuticals, biotechnology, banks and solid trending stocks which continue to deliver. The most notable example being Walt Disney in the US up until the overnight movements. Stock down circa 10%.

I will look to put a note out, post the close of each month with an update. Please use this as an opportunity to ask any questions you might have.

I’d buy now…

Looking through my list of preferred US Equity names, I wanted to pick a stock per sector that is still worth buying. Here’s the list:

FREEPORT MCMORAN
MORGAN STANLEY
TYSON
VIACOM
HALLIBURTON
IBM
LINKEDIN
ROCKWELL
ALIBABA.
COACH INC.

In other spaces:

Buy USD – Sell EUR, JPY against it.
Take profits on Oil trades for possible entry at lower prices in the near term.
Buy Volatility Index ETF – Sell in May and go away! Volatility index is inverse to Equity markets as you can see below. The S&P 500 (black) and VIX Index (orange) chart represents the correlation. With the market failing to break new highs convincingly, I think we may see a sell off in the near term = VIX index UP.

Buy ASX200 CFD or SPI Futures Contract/s on short term move back to 5750/5800.

Busy week ahead – Buy USD

May the 4th be with you.

This week is likely to be one of the busiest trading weeks for 2015 due to the sheer amount on data, company releases and central bank statements, both here and overseas.
There was solid bounce in US equities on Friday night is likely to flow through to Asia this morning. There was no trade in Europe on Friday for May Day holiday and London is closed tonight for the same holiday.
After a harsh winter brought U.S. growth almost to a halt in the first three months of 2015, April’s non-farm payrolls report, due on Friday, will signal whether the world’s largest economy is faring any better in the second quarter.
MONSANTO: has approached SYNGENTA about a takeover, almost a year after a previous attempt fell apart, according to people familiar with the matter.
TESLA: unveiled a line of home and industrial battery packs late Thursday, “power wall” batteries—ranging from a $3,000 7 kilowatt-hour wall-mounted unit to a $3,500 10 kwh unit—cost far less than the going rate for large-scale batteries and can be easier to install. Tesla aims to begin delivering units by the summer from its car factory in California.

DOW: +1.03%, S&P500: +1.09% and NASDAQ: -+1.29%

The AUD has moved well away from 80 cents on the back of the article and it’s very likely that the Statement of Monetary Policy on Friday will fill in the details as to why the RBA moved rates and if there could be more cuts to come – another argument over semantics could be had here. The AUD is going to move very quickly this week.

With the volume of data, the company and Reserve bank announcements, there will be some big moves in the currencies this week. Above is the US Dollar Index chart that tracks the strength of the USD against a basket of other major currencies. The current holding and respecting of the 95.00 level and 100 day moving average may be a sign of the USD re-strengthening after the past three weeks of weakness. Look to take up long USD positions on the back of recent weakness.

Our Eyes Are On the Following….

Most of my focus at the moment is offshore, predominantly in the US as we are seeing a strengthening USD and a falling AUD, meaning that when we close trades in USD, our profits in AUD are even greater. In the last six months alone, if you were to hold your cash in USD rather than in AUD in your Australian bank account, you would have returned approximately 17% alone as the Aussie Dollar has fallen away.

In terms of US names we are predominantly invested in the following companies:

Apple Inc. (AAPL) – Target price $137.00.

Citigroup (C) – Target price $73.00.

Rackspace (RAX) – Target price $55.00.

Monster Beverage Corp. (MNST) – Target price $136.00.

Another huge focus of my client’s portfolio’s is getting exposure to the WTI Light Crude Oil price through United States Oil Fund (USO) and PowerShares DB Oil fund (DBO) Exchange Traded Funds. I am expecting to see a bounce in the oil price in the next calendar year and looking to take advantage of this through these funds.

On the local front the names I have in mind at the moment are all yield plays essentially:

Most of the banks.

Telstra (TLS)

Wesfarmers (WES)

Woolworths (WOW)

Flight Centre (FLT)

Woodside Petroleum (WPL) – again, to get exposure to the oil price on an expected rebound.

I think overall, the markets are due for a slight correction before looking to move higher throughout the latter half of the year. Feel free to contact me for any research on the above stocks and what I am basing my thoughts on.

Covered Call Premium – October 2014

Below is a link to the yields achievable on a monthly basis through a Covered Call Writing Strategy:

Dow Jones October 2014 Covered Calls

If you have any questions please contact Pilkington Trading.

The current annualised return on this strategy is 19.74%.

Please enquire about current performance spreadsheets if you are interested.

Seasonal Trade Ideas – June to October.

In relation to my seasonality posts that I have posted earlier in the year, below is a link to the June – October seasonality of Australian stocks that BBY believes could have some upside potential through this period.

Please click the link below to view the comprehensive report.

Trade Ideas – June through to October 2014

Feel free to contact me with any queries or questions in regards to this report or how you can invest in any of the stocks.

It’s time to build/begin that portfolio! 20.05.2014

Thought I would pen together a quick email to update you on where the markets are sitting, my views on what I believe will be happening and the stocks I have/looking to gain exposure in.

I believe we are starting to see the top of the market and a small pull back is upon us. The XJO has had two strong negative days and I think we should see the index head toward 5300 over the next month or so. I still believe we will see the markets rally from June onwards and this pull back will be a great opportunity to enter the markets with a view through to the years end and beyond. There is plenty of money sitting on the sidelines with massive fund managers and superannuation providers. There is talk that a shift from bonds (only returning 2.56% on 10 year US Treasury notes ) into the equity markets will bring a whole new wave of buying momentum. I have a target locally of the ASX200 reaching 6000 by the years end.

High yielding stocks are paying investors dividends upwards of 5-6% (TLS, WPL, NAB etc.) alone on local soil and some stocks in the US yielding upwards of 8% in strong, well performing companies such as Seadrill Ltd. (10.47%) and High yielding ETFs . I think it is a great time to look into getting into some safe, high yielding stocks that have a good management team behind them and are looking to grow. I especially like the look of Woolworths (WOW.asx) on the local market. The stock has broken the $37.00 level convincingly, come back and is looking to use this level as a support before we see a rally higher from these levels. Coinciding with the 50 day moving average, a key rising trend line and the stock bouncing from the 38.2 Fibonacci retracement, I think we will see a move higher from these levels.

These stocks will drive our market higher, return investors with great dividends and have a good chance of seeing capital growth in the medium to long term. It’s a great time to be looking to build on your current portfolio or begin to build one with the support of BBY Limited and myself. With access to the best local stock and sector research, 24/7 trading desk support and execution services, access to daily reports, market wraps and trade ideas, do yourself a favour and find out how we can structure a strategy to suit your investment style and risk appetite.

There are both the online (more do it yourself with access to most features) and full service broking options (complete full service broking option that allows you to build a strong portfolio with a hand to hold) available. For a conservative Covered Call writing or High Yielding option strategy that may suit your SMSF or personal trading goals with a long term outlook please ask as this is an area that is extremely important to remain in control of (Now that we are all going to work until we are 70!).

Please contact me if you are interested in knowing about the stocks both locally and internationally that I have invested in myself and have the majority of my clients gaining exposure in.

Clients, please feel free to ask me any questions you may have.

Why you’re missing out by not being in the markets! (Market update) 04.03.14

Thought I would send out a quick blast with a bit of market news and what I am currently looking at/actively trading at the moment.

We are seeing the markets pull off a little bit at the moment due to all the noise surrounding Russia and Ukraine. Markets don’t like uncertainty. We have seen gold rally because of this (currently at the $1350.00 level). This is just noise and I think the market is beginning to realise that a diplomatic resolution looks like the likely outcome. This is creating a few good short term buying opportunities along the likes of BHP, RIO, AMC, TLS, CWN and IRE.

I am still bullish for the months leading into May before I think we’ll see a sell off and then a strong run into the end of the year from the beginning of July. Sell in May and go away they say!

I am looking at Westpac at the moment for a possible trade throughout the months of March and April as these months have generally been strong for the company as well as the ASX200 index over the last 12 years:

In the US I have had my interests in the following stocks:

Las Vegas Sands (LVS)
Monsanto (MON)
IBM (IBM)
MasterCard (MA)
Bed Bath and Beyond (BBBY) (As a seasonal March/April trade)

We have done well so far in these stocks and I think there is still room to run. Possibly a time to buy the dips!? As Warren Buffett is doing:

http://www.businessinsider.com.au/warren-buffett-speaks-on-cnbc-2014-3

Please let me know if you would like to look into any of the strategies I have currently in play for these stocks or wish to open an account to get exposure to the markets.