CBA Offloads Its Insurance Arm

Posted on | by Todd | Leave a Comment on CBA Offloads Its Insurance Arm

Shares of CBA opened higher in early trade on the news that the bank has sold its troubled insurance business to the Chinese owned AIA Group for $3.8 billion.

The sale of Comminsure Life was largely considered a fire sale considering several problems involving denying payments to policyholders and pressuring medical assessors to reject client’s claims.

Our ALGO engine gave a sell signal in CBA on July 4th at $84.00. We consider this bounce in price as corrective and still see scope for CBA shares to return to the low $70.00 handle.

Commonwealth Bank

 

ALGO Update: Stay Short CBA

Posted on | by Todd | Leave a Comment on ALGO Update: Stay Short CBA

Shares of CBA have traded back over $75.00 in early trade on the back of solid gains in the US banking sector on Wall Street.

However, we see this as a brief corrective move within the broader 8% decline over the last month.

A report from Credit Suisse this morning suggests that the CBA could face a $200 million increase in its annual operating costs over the next two years because of legal fees and related costs to defend the AUSTRAC money laundering accusations.

Our ALGO engine triggered a sell signal in CBA on July 4th at $84.00. We see solid technical resistance in the $75.60 area and more range extension to the $70.00 handle over the medium term.

Commonwealth Bank

 

More Troubles For The CBA

Posted on | by Todd | Leave a Comment on More Troubles For The CBA

Shares of CBA have posted a new low for the year at $76.55  as APRA announced that they will be setting up an inquiry after a series of problems prompted concerns about the bank’s culture, leadership and accountability.

This is  not a good addition to CBA’s current AML allegations from AUSTRAC and a class action suit filed on the behalf of shareholders.

On balance, we don’t see any obvious catalyst to drive any of the domestic banking names higher and CBA now has the weakest technical structure.

The next key price support for CBA will be found near the October 2016 area near $75.00.

  Commonwealth Bank

 

 

 

 

Algo Update – Sell Signal Commonwealth Bank

Posted on | by Leon Hinde | Leave a Comment on Algo Update – Sell Signal Commonwealth Bank

Our Algo Engine flagged the negative technical structure in leading financials firms Commonwealth Bank and Goldman Sachs. These are both leading industry names which have bearish price action developing.

Investors should remain on the short side of these assets.

The charts below illustrate  the recent Algo Short signals along with the resistance or selling pressure, which is now building.

Chart – CBA
Chart – GS

ALGO Update: CBA And MQG Look To Be Slipping Lower

Posted on | by Todd | Leave a Comment on ALGO Update: CBA And MQG Look To Be Slipping Lower

Our ALGO engine triggered a sell signal in CBA on June 29th at $84.10.

Since then the stock has traded as low as $81.80 and has a clear downward bias. In addition, the share price of MQG has also moved lower since late-June and internal indicators appear to be picking up momentum on the downside.

The Aussie banks, in general,  look to have a downward bias relative to the prices seen in late-May.

As such, we see the next technical support target for CBA at $78.50 and at $85.90 for MQG.

For more specific chart analysis of the local banking sector, send us an email or give us a call.

CBA

 

MQG

Rotation Out Of Banking Stocks

Posted on | by Todd | Leave a Comment on Rotation Out Of Banking Stocks

Since Treasurer Scott Morrison announced a banking levy in the May 9th budget, banking stocks have been sold off across the board.

It’s become clear that a fair percentage of this investment flow has rotated into the local Insurance names with IAG and Suncorp both posting material gains since early May.

We hold both of these stocks in client portfolios and they are now up 12% and 8% since mid-May, respectfully.

With respect to the re-valuation in the banking shares, NAB has posted a fresh low at 29.00 in early trade today.

Both WBC and ANZ are approaching the lows posted in early June, while MQG and CBA have held up better but are still pointing lower.

On balance, we continue to expect to see rotation out of the banking names to the benefit of the insurance stocks.

IAG

Suncorp

NAB

Bad News For Aussie Banks

Posted on | by Todd | Leave a Comment on Bad News For Aussie Banks

Australian banking names received a double-dose of bad news last night as the Parliament passed the $6.2 billion banking levy and Moody’s downgraded their long-term credit ratings citing risks associated with the local housing market.

Shares in all the major banks have opened lower today with Westpac half-a-percent lower. The banking stocks have posted a rebound over the last few sessions but now look poised to re-test the lower price levels seen in early June.

Our ongoing concern about the banking sector’s current valuations have been: limited growth in the loan generation area, as well as, deteriorating quality of their overall loan exposures.

The banking levy, which commences July 1st, and the prospects of higher funding costs due to the credit downgrade won’t improve the banking sector’s profitability over the longer-term.

ANZ

CBA

MQG

NAB

WBC

Banks Reverse Levy-Related Plunge

Posted on | by Todd | Leave a Comment on Banks Reverse Levy-Related Plunge

Shares of the major banks dropped sharply at yesterday’s open as  budget-related fears triggered intra-day volatility rates not seen in the banking names for over 2 years.

Prices rebounded throughout the trading session in what we consider technical , value-related buying, which substantially pared the early losses.

The strong reversal in share prices triggered the ALGO engine to give buy signals in ANZ, CBA, WBC .

Given the murky outlook for earnings growth, and increased bad-loan provisions across the banking sector, we only expect the recent price action to form a 50% retracement of the recent losses, at best.

Commonwealth Bank