article 3 months old

Buying Opportunity In Woodside

Technicals | Feb 04 2014

This story features CEDAR WOODS PROPERTIES LIMITED, and other companies. For more info SHARE ANALYSIS: CWP

By Michael Gable 

A disappointing ISM figure [US manufacturing PMI] last night will see our market take a hit today – just when it appeared to be finding some good support above that key 5150 region. The next levels down in our opinion are the December low around 5050, and if that gets breached, then around 4950 appears to be strong support. However, current levels are looking attractive and we have probably almost washed out the nervous investors who have been concerned about the earnings season. The S&P 500 is back to its longer term trend line, the ISM figure was affected by poor weather, and since mid 2008, our market has produced positive returns through 9/12 earnings seasons. Looking to buy weakness would still have to be the preferred strategy to dumping quality stock down here. On the back of that, we have found some great little opportunities today in Cedar Woods ((CWP)) , and short term trading opportunities in Woodside Petroleum ((WPL)) and Wotif.com ((WTF)).

One strategy to consider over coming weeks is the covered call strategy. A few stocks will go ex dividend at the end of this month and some may well drop a little more after going ex dividend. An example is Commonwealth Bank ((CBA)). That is one stock that would offer a great opportunity to write a call option against before it goes ex dividend. There will be other opportunities as well, so we will be looking to uncover other opportunities to write some calls and pick up some extra income.
 

Woodside Petroleum


 

Woodside has continued to trade in a channel since August last year, despite what the market can throw at it. It has once again reached the bottom of the current channel and as long as it can hold these levels around $37, you would expect it to then trade up towards $39 again. Traders can therefore look to take advantage of weakness today to go long and place a tight stop loss. If the stock breaks down here, then expect levels closer to $34 – $35. That should provide good support for the stock, especially considering that it is already yielding 7.9%.
 

Content included in this article is not by association the view of FNArena (see our disclaimer).
 
Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

Share on FacebookTweet about this on TwitterShare on LinkedIn

Click to view our Glossary of Financial Terms

CHARTS

CBA CWP

For more info SHARE ANALYSIS: CBA - COMMONWEALTH BANK OF AUSTRALIA

For more info SHARE ANALYSIS: CWP - CEDAR WOODS PROPERTIES LIMITED