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Darren Jackson, Calibre Investments

BUY RECOMMENDATIONS

Virgin Australia Holdings (VAH)

Chart: Share price over the year versus ASX200 (XJO)

A speculative trading buy on a materially improved outlook. Virgin is no longer pursuing a costly price war with Qantas, so the old duopoly should resume. Jet fuel prices have dropped to four year lows and are likely to remain low for some time. Fuel represents a huge input cost for airlines.

Amcor (AMC)

Chart: Share price over the year versus ASX200 (XJO)

A boring but dependable industrial stock that continues to deliver. Packaging is probably one of the least dynamic industries with high barriers to entry. Amcor offers desirable exposure to non-Australian dollar earnings, which are also growing and are sustainable.

HOLD RECOMMENDATIONS

Regis Healthcare (REG)

Chart: Share price over the year versus ASX200 (XJO)

Regis is a newly listed aged care provider so it benefits from an ageing society. The company offers relatively defensive earnings and has a solid track record of delivering growth. Expect significant upside via future expansion of aged care centres, either organically or through acquisitions.

Slater & Gordon (SGH)

Chart: Share price over the year versus ASX200 (XJO)

We recommended buying this personal injury law firm about a year ago. Since then, the stock is up more than 30 per cent. We continue to hold. SGH offers diversified and highly defensive earnings, which are desirable in an environment where there’s overall market weakness. It continues to roll up the UK personal injury space, which boosts earnings per share.

SELL RECOMMENDATIONS

Whitehaven Coal (WHC)

Chart: Share price over the year versus ASX200 (XJO)

The company has quality assets and a quality management team. Unfortunately, the coal price has been decimated. Our outlook for thermal and metallurgical coal remains negative. Coal continues to be displaced by cheap and cleaner alternatives, like natural gas and oil. Additionally, China is becoming increasingly aware of coal’s environmental effects.

WorleyParsons (WOR)

Chart: Share price over the year versus ASX200 (XJO)

Energy companies in response to lower energy prices will look to reduce capital expenditure as projects become increasingly unfeasible. They will look to cut their operating expenditure in an effort to sustain margins. Both of these are significant headwinds for WorleyParsons whose operations revolve around servicing the energy sector.

 

Michael Gable, Fairmont Equities

BUY RECOMMENDATIONS

Rio Tinto (RIO)

Chart: Share price over the year versus ASX200 (XJO)

The global miner recently fell to a support line and completed a bullish harami pattern, or an “inside week” if you are trading bar charts. This is where the body of the most recent candle is wholly contained within the previous dark candle. This reversal signal could indicate the end of the downtrend that started in February this year when we noticed the bearish engulfing pattern that signified the end of the uptrend – the same pattern that occurred in March last year. With RIO receiving interest from Glencore, we believe these pricing levels will hold and it will start to trend higher again over coming months.

Sonic Healthcare (SHL)

Chart: Share price over the year versus ASX200 (XJO)

Despite falling more than 6 per cent on the day of its AGM, this medical diagnostics company has managed to hold these levels, which recently was right on the longer term uptrend line. Although earnings guidance is now slightly lower, the consensus valuation for the company is several per cent higher than current levels. The company is also well positioned for further acquisitions, something the market has historically responded to positively. At recent current levels, sitting on support, SHL is a buy. The shares finished at $17.35 on December 3.

HOLD RECOMMENDATIONS

Woolworths (WOW)

Chart: Share price over the year versus ASX200 (XJO)

WOW has generally been drifting back since peaking in April this year. It’s bounced a few times which has provided some nice trading opportunities, but the recent fall has seen the downwards move accelerate as investors rush out at the last minute. It’s now found itself at the next level of support. If we measure the length of the uptrend that started in 2011 and finished in April this year, you will notice the stock has retraced 50 per cent of that move. It’s also looking heavily oversold on the daily chart. From here, we expect WOW to drag itself higher over the next few weeks or so, and we are looking at resistance between about $34.50 and $35. The shares were trading at $31.05 on December 4.

JB Hi-Fi (JBH)

Chart: Share price over the year versus ASX200 (XJO)

The 10 per cent rally after the AGM in October has possibly flushed out some short sellers. Since then, the share price has been tracking sideways, forming what appears to be a symmetrical triangle as it congests to a point. With interest rates remaining low and JBH at an attractive valuation, this charting pattern is showing us that we could see further upside from here. An upside break from this symmetrical triangle will see JBH resume its recent rally, hopefully into Christmas. We anticipate some resistance near $17.50. The shares were trading at $16.30 on December 4.

SELL RECOMMENDATIONS

ASG Group (ASZ)

Chart: Share price over the year versus ASX200 (XJO)

The shares have strongly rallied since June, but it appears this uptrend is finished. Firstly, we have seen a shooting star reversal form back in October. The stock was then sold off sharply, breaking the uptrend line. It then tried to head higher, but the price action was much softer compared to when it was heading higher in the past few months. You will notice that during the uptrend, the share price had rallied impulsively and the pullbacks have been smaller. Now ASZ is doing the opposite. Not only that, but some of the falls have been on high volume. This is telling us the shares have peaked for now and the uptrend is broken. Shares in this IT company were trading at 71 cents on December 4.

Qantas (QAN)

Chart: Share price over the year versus ASX200 (XJO)

QAN has outperformed recently after ending domestic capacity wars with Virgin and in response to the oil price fall. It could be argued the oil price fall is temporary and QAN still encounters the same issues with government sponsored competition and a unionised workforce. Not only are the shares fully valued, but it’s hit some strong, long term resistance at the $2 mark. As a result, traders who have done well on the back of the recent run should consider selling into this strength. The shares were trading at $2.06 on December 4.

 

Les Szancer, Paradigm Securities 

BUY RECOMMENDATIONS

Lamboo Resources (LMB)

Chart: Share price over the year versus ASX200 (XJO)

Recent news has been disappointing for this graphite company. The Hengda deal has come unstuck and the share price has suffered. So why consider buying Lamboo? Well it still has pure flake graphite. I believe it will do another deal or joint venture in future. Then I would expect the price to rebound from these low levels. The shares closed at 15.5 cents on December 3.

Crater Gold Mining (CGN)

Chart: Share price over the year versus ASX200 (XJO)

It has terrific projects in Papua New Guinea and we expect first mining to start soon. It’s modestly targeting only 10,000 ounces initially, but at a cost of less than $400 an ounce. It potentially has a lot of gold to mine and it’s accessible. Everything is in place for this junior miner to move up in the ranks of gold producers.

HOLD RECOMMENDATIONS

St George Mining (SGQ)

Chart: Share price over the year versus ASX200 (XJO)

Like a lot of small miners, the price of this gold and nickel sulphides company has been smashed. But company management is optimistic about potential new discoveries. The company is issuing one free option for every 10 shares held, exercisable in two and a half years. Go to its website for details.

Prima Biomed (PRR) 

Chart: Share price over the year versus ASX200 (XJO)

This has been a very long road to travel and has no doubt tested the patience of many investors. Its flagship CVac is getting very close to commercialisation in Israel for treating ovarian cancer followed by pancreatic cancer. It has partnerships in place with big pharmaceutical companies, so I think the wait will be worth the strong potential upside.

SELL RECOMMENDATIONS

Boart Longyear (BLY)

Chart: Share price over the year versus ASX200 (XJO)

A drilling services provider and products maker, it operates in more than 40 countries for a diverse mining customer base spanning a wide range of commodities, including copper, gold, nickel and zinc. The share price started the year around 30 cents, managed to hit 50 cents, but has retreated to finish at 16 cents on December 3. Move on.

Fortescue Metals Group (FMG)

Chart: Share price over the year versus ASX200 (XJO)

At this level, one might be tempted to buy FMG rather than sell it. However, given the uncertainty surrounding the iron ore price, I would rather be out of this stock and sit on the sidelines for now. Less than a year ago it hit $6, but the trend line is still heading down. The share price is at its lowest level in about five years and I don’t see any support. The shares closed at $2.71 on December 3.

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