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Viewing entries tagged with 'Equities'

BBY Investing is hiring Private Client Advisors

Posted on 8 October 2013

BBY are seeking experienced Private Client Advisors who have:

  • proven sales and business developments results
  • an existing or transferrable client base
  • appropriate qualification
  • sound knowledge of industry regulation and compliance underpinned by a strong ethical foundation

For full details, please click here to view the flyer.

If you match our ideal candidate profile, we would be very keen to hear from you.

BBY (NZ) Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities

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team Graham Parlane

Chart of Interest - Sugar

Posted by Graham Parlane on 8 March 2013

Hi

I’ve been stalking this one for a while now. Wedge formations are notoriously long lasting so patience has been required.

Interestingly I cannot find a lot of buzz on the wires (which I like!) about the latest move apart from expectations thatChina’s imports will rise in Q1

1)     Long term picture – The price of Sugar has halved over the last 2 years

Click here to view chart

2)     A closer look. The suggestion here is that Sugar broke below the long term support line but quickly reversed and then days later has bounded higher again. Could this be a very significant and long term low in place now?

Closer look – click here to view chart

I’ll be watching the news wires to see if there is a developing Sugar story over coming days and weeks.

Cheers G.

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team Graham Parlane

Japan Stocks and Mr Abe - an Opportunity?

Posted by Graham Parlane on 16 January 2013

All

I have profiled (ad nauseam) the potential for JPY weakness over the last 6 months of last year with good effect as the USD/JPY rose from 77.00 to 90.00 and the NZD/JPY from 58.00 to 75.00 in the same period.

What I haven’t done is document the opportunity for very large rises in Japanese stocks.

The real speed of the JPY move has come as the market came to understand that former PM Abe would once again hold power, pledging to learn from his previous mistakes as PM and essentially do the opposite (monetary policy wise) to his last tenure. Mr Abe says that in 2006 he mistakenly backed the BOJ when they raised interest rates. Following that decision the Nikkei stock index fell by half and the JPY appreciated by 40% against the USD.

Now Mr Abe is back at the helm and with his pledge to enforce a 2.0% inflation target on the BOJ, and the measures they’ll need to implement to achieve that will have to be nothing short of extraordinary. Indeed, one analyst I have come to respect, says Abe’s program will be like Bernanke’s but ‘on steroids’ !

Now to understand the potential for Japanese stocks we need to look back a bit in history. In 1989 the Nikkei Index was close to 40,000 and only this month the Nikkei was languishing below 10,000…………………incredible that the valuation of Japan’s corporate sector is currently worth ¼ of what it was more the 20 years ago. Now that’s a bear market huh? Here is a chart back to 1963 (great year that by the way!)

Japan.IZ – Click here to view chart

Now the other chart that screams that Japanese stocks are absurdly cheap is the Price to Book ratio that shows that in 2011 (I couldn’t find a more up to date chart but I understand that ratio hasn’t changed much) the index as a whole was trading BELOW is net asset backing at 0.9 !

Japan’s Market Index – click here to view chart

So here’s the nib. Japan has a stock market that is super cheap (ridiculously so?) and now they have a government hell bent on cutting interest rates and printing money forcing investors back into stocks. That and the weakening JPY, which significantly helps the blue chip exporters, should see Japanese stocks much higher this year.

I’ll be spending the rest of this week looking for the best vehicles (financial instruments) to express this trade and will revert. For now I’ll buy a small amount of Nikkei and look to add a bigger amount on any dip.

Cheers G.

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team Graham Parlane

US Equities - don't fight the FED

Posted by Graham Parlane on 16 January 2013

All

U.S equities are looking very strong in my opinion. And why not?

The FED have the monetary policy taps open and are pumping hard (at an increased rate in recent months with QE till 6.5% unemployed achieved), the Fed tells us that U.S companies are lean and mean (no excess staff, costs cut back to a minimum and sitting on huge piles of cash) and with no yield available anywhere investors are being pushed back into shares.

And this is the kicker, the FED wants asset prices higher! If stocks (and houses) appreciate then the debt burden (which created the GFC) dissipates i.e. they inflate their way out of trouble.

Today the Dow Jones Transports Index rose to ALL TIME HIGHS ! The transport index is seen as an advance indicator because transport companies move goods around before the sales of those goods are recorded in official figures. Thus their share prices are highly sensitive to early swings in business cycles.

Fig 1 – Dow Jones Transports weekly chart back 10 years– Breaking to all-time highs, blue sky ahead.

DJTRAN.IZ – click here to view chart

Fig 2 – Dow Jones Index. Market tried lower first last night only to end higher within the context of an established uptrend.

DJI.I – click here to view chart

If you’re buying into this idea call me to tailor the position size to an appropriate risk on your account.

DON’T FIGHT THE FED.

G.

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team Graham Parlane

Apple Inc - Far enough for now?

Posted by Graham Parlane on 19 November 2012

Hi

Apple Inc. shares have fallen 28% since September (20% since Steve Jobs death) in a rather brutal sell off. As long time writer Dennis Gartman is want to say “Apple was one of the ‘Generals’ leading the equity market troops to the topside in days gone by and has been the ‘general’ leading the way south. Can Apple now lead markets higher again in the near term?

Fridays price action is highly suggestive of very strong buying interest in the US$505/525 area. Perhaps the killer sell off has gone far enough for now ?

AAPL – Click here to view chart

Cheers G.

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team Graham Parlane

NZD/USD - No one's talking about it!

Posted by Graham Parlane on 16 November 2012

All

I’m amazed that there is so little chatter around the potential for a really stiff NZD/USD fall. Has the recent lack of relative volatility lulled the market into complacency?

Sharply falling global share markets, rotten local employment and retail sales data and our closest (and biggest) trading neighbour is in the midst of an interest rate cutting cycle and I’m not seeing terribly much interest to sell. Nor am I seeing much chatter on the wires regarding the possibility of a big fall. AMAZING!

Here’s an overlay chart of NZD/USD (in yellow) and the Dow Jones Index (in black). Since the GFC the two instruments have been highly correlated but look at the magnitude of the Dow fall comparative to that of the NZD in recent weeks.

The NZD/USD has been viewed by most as being somewhat overvalued for quite some time now, certainly departing RBNZ Governor Bollard fired a parting shot at the U.S. and the FED’s policies which keep the USD depressed (and as a result overvalue the likes of the NZD). I’m hearing the farmers have their cheque books firmly closed at present which doesn’t help. Is the Q3 in NZ just a soft blip or something more, is the USD ready to roar……..no one knows of course but the sum of what we do know right now suggests the kiwi may have quite a bit further to fall.

NZDUSD – click here to view chart

G.

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team Graham Parlane

China - are Chinese stocks now super cheap?

Posted by Graham Parlane on 9 October 2012

All

China growth this year is forecast to slip to about 7.7% before bouncing back into the 8% range next year depending on who you listen to, rates of growth that are just incredible for anywhere else in the world.(see…IMF Forecasts China Real GDP To Grow 7.8% in 2012, 8.2% in 2013. The World Bank forecasts growth in China’s economy this year is 7.7 per cent, and rebound in 2013 to 8.1 per cent.)

The RBA, who have about as much skin in the China game as anyone, continue to see demand from China staying (relatively) strong for another decade. As such the recent weakness in China related commodities is likely to have been largely an inventory cleanout rather than the end of an era.

Further, the Chinese authorities are already deploying substantial stimulus measures and have vast resources at their disposal in the form of $3 trillion plus in FX reserves.

Chinese stocks have been falling since the Shanghai Composite Index topped out at 6000 around 5 years ago. Today, Chinese equities are the cheapest in 15 years on an inflation adjusted basis.

Technically there is massive ‘bullish divergence’ on the medium term charts with the run down over the last 6 months not confirmed by the MACD momentum studies.

Fig 1 – Note the clear bullish divergence of the MACD momentum indicator

China Stocks – click here to view chart 

Fig 2 – a Longer term perspective. China has been growing at 8-11% for the last 5 years and their stock market is 1/3rd of the price it was. Really?

China Stocks a longer term perspective – click here to view chart 

There are numerous ways of capturing the China story via your BBY Online platform from individual companies lasted on various exhanges around the world to ETF’s that look to replicate/exceed the main index.

Regards G.

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team Graham Parlane

Chart of interest - Apple Inc

Posted by Graham Parlane on 10 September 2012

All

Interestingly it was a VERY poor day for Apple Inc. shares ahead of the expected Sept 12th iPhone 5 release. This is the first major release without Steve Jobs at the helm.

The chart displays a simple ‘key day reversal’ from new highs. Those sceptical of the current Apple Inc. valuation have a lovely clear trading opportunity given the chart signal and impending announcement.

Apple Inc – Click here to view chart

Cheers G.

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Bullish failure?

Posted by Graham Parlane on 9 July 2012

All

Last week I reluctantly suggested that equity markets and ‘risk’ could turn north in response to the Eurozone developments of the previous week. Those thoughts were made on balancing weak data against the possibility of central bank responses which I thought would bolster sentiment.

However, after a week where we saw China surprise and cut interest rates, the UK expand their quantitative easing program and the ECB cut interest rates, global equity markets have failed to take solace from the central bank moves and ended last week lower than they started. The very weak global manufacturing PMI’s and the tepid U.S jobs report certainly overshadowed the stimulus moves. That, I’d imagine, is not a good sign.

In the wake of last week a number of ‘risk on’ instruments are displaying potential ‘topping’ signals.

NZD/USD – Dennis Gartman often likes to return to a trade in the 50%-61.8% box of the previous move. The NZD/USD in this instance traced out a ‘shooting star’ reversal week right from the 61.8% bounce of the last fall. No joy from central bank actions + sharply falling commodities (our dairy prices fell nearly 6% last week) suggest downside is again back in vogue. The AUD/USD is almost identical.

NZDUSD – Click here to view chart

S&P500 – The daily chart of the  ‘big board’ in the U.S. paints a similar picture. Whilst the index stays under Thursday’s high the technicals look bearish.

S&P500 – Click here to view chart

There are two obvious game changers lurking in the background. Any certainty that the FED will come riding over the hill with QE3 will change the dynamic as will a wide ranging agreement from European policy makers. Until then it appears that the doom scenario may again hold sway.

G.

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team Graham Parlane

Bullish Failure?

Posted by Graham Parlane on 9 July 2012

All

Last week I reluctantly suggested that equity markets and ‘risk’ could turn north in response to the Eurozone developments of the previous week. Those thoughts were made on balancing weak data against the possibility of central bank responses which I thought would bolster sentiment.

However, after a week where we saw China surprise and cut interest rates, the UK expand their quantitative easing program and the ECB cut interest rates, global equity markets have failed to take solace from the central bank moves and ended last week lower than they started. The very weak global manufacturing PMI’s and the tepid U.S jobs report certainly overshadowed the stimulus moves. That, I’d imagine, is not a good sign.

In the wake of last week a number of ‘risk on’ instruments are displaying potential ‘topping’ signals.

NZD/USD – Dennis Gartman often likes to return to a trade in the 50%-61.8% box of the previous move. The NZD/USD in this instance traced out a ‘shooting star’ reversal week right from the 61.8% bounce of the last fall. No joy from central bank actions + sharply falling commodities (our dairy prices fell nearly 6% last week) suggest downside is again back in vogue. The AUD/USD is almost identical.

NZDUSD – Click here to view chart

S&P500 – The daily chart of the  ‘big board’ in the U.S. paints a similar picture. Whilst the index stays under Thursday’s high the technicals look bearish.

S&P500 – Click here to view chart

There are two obvious game changers lurking in the background. Any certainty that the FED will come riding over the hill with QE3 will change the dynamic as will a wide ranging agreement from European policy makers. Until then it appears that the doom scenario may again hold sway.

G.

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