Afternoon Report / ASX200 Drifts Lower on General Lack of Interest

By Market Matters 15 May 17

ASX200 Drifts Lower on General Lack of Interest

Market Matters Afternoon Report 15th May 2017

The market opened lower than expected this morning, which then rallied off its lows ahead of the China data at 11.30am, only to disappoint and drift marginally lower by the close of business.

From a sector perspective, the telcos and banks added the most support as buying re-emerged following the budget bank sell-off last week, however they were unable to offset the losses from the healthcare, real estate and consumer staples.

We had a range today of +/- 41 points, a high of 5847, a low of 5806 and a close of 5838, up only 2 points, or 0.03%.

Today we allocated 5% of the MM portfolio into Westpac (WBC) ~$32.70 ahead of its 94c fully franked dividend on Thursday – this will be explained in more detail in tomorrow morning’s report.

ASX200 Intra-day Chart

The ASX200 actually made a fresh low for May at 5805, smack on its trend line support. While we still envisage a test of 5700 in May / June, our opinion is the short-term weakness will be led by US stocks. A close on the ASX200 under 5800 support is likely to see a fairly rapid decent of ~2%.

ASX200 Daily Chart

In what was a very quiet day from both a price action and news perspective, the standout was TPG Capital revising its bid for Fairfax (FXJ) to $1.20 for the entire business – Domain.com remains the jewel they are trying to acquire.

However while the stock was the best performer in the ASX200, it still spent most of the day trading 5% below the offer price – clearly investors believe the bid will fail.

Unfortunately we now believe the stock is 50-50 at current levels.

Fairfax (FXJ) Monthly Chart

Also about the upcoming Market Matters Seminar at The Four Seasons Hotel In Sydney – reply to this email for complementary tickets to our seminar if you haven't already or visit www.marketmatterslive.com.au

Have a great afternoon,

The Market Matters Team


Disclosure

Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday.

 

Disclaimer 

All figures contained from sources believed to be accurate.  Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy.  Prices as at 15/05/2017.  4.21PM.

 

Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The MarketMatters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.

The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor.  Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product.

The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports.

If you rely on a Report, you do so at your own risk. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.

To unsubscribe. Click Here