Shorting the banks was a popular strategy last week following weak offshore leads. Westpac was downgraded to Neutral by Macquarie as its 3Q update disappointed the market.

Diawa cut its target for NAB from $29 to $26.10. The uncertainty surrounding its bid for AXA is also weighing on the stock.

ANZ, too, was out of favour with plenty of shorting activity placing it in the top 5 stocks to short.

As for long positions, the top stock was BHP – with good technical support around $37.00.

Telstra hit fresh all time lows after going ex dividend. Any buying last week was mainly for the dividend as uncertainty surrounding the election continues, and consequently the fate of NBN.

 

Top Australian Brokers

 

AMP was upgraded to Neutral from underweight by JP Morgan – with a $6.20 target. The company delivered a 17% H1 profit increase, which pleased the market.

If you’re a little unsure of the terminology, when you go ‘long’ a CFD, you profit if the price of the CFD rises (you buy the CFD in the hope that when you come to sell the CFD at a later date, the share price of the underlying stock has risen).

When shorting a CFD you profit if the price of the CFD falls (you sell a CFD, in the hope that when you come to buy the CFD at some time in the future, the share price of the underlying stock has fallen).

Take a look at the top CFD stocks targeted by traders below plus the reasons why:

Long positions – Top 5 (18 Aug – 25 Aug)

 Ranking  Code  Stock  Position Held  Commentary
1 BHP BHP BILLITON LTD  B The stock has been weighed on by both offshore Equity markets and its bid for Potash Corp. This was ahead of a below consensus FY result. All this aside, traders appeared to be keen on the stock and there is good technical support around $37.00
2 TLS TELSTRA CORP LTD  B Telstra hit fresh all time lows after going ex dividend. Generally buying was for the dividend, as uncertainty around election continues and consequently fate of NBN
3 WBC WESTPAC BANKING CORP  B Top traded bank again this week. We saw buying before it released 3Q update which disappointed the market.
4 AMP AMP LTD  B AMP was upgraded to Neutral from underweight by JP Morgan with $6.20 target. Company delivered 17% H1 profit increase.
5 QBE

QBE INSURANCE GROUP LIMITED

  B QBE released 39% H1 profit fall and Citi cut stock to Hold. Traders felt the stock has put in a base around $16.20/50

Short positions – Top 5 (18 Aug – 25 Aug)

 Ranking  Code  Stock Position   Held  Commentary
 1 RIO

 

 RIO TINTO LTD S Rio continues to outperform BHP, however, traders seemed keen to short on back of speculation around possible Potash Corp bid.
2 NAB NATIONAL AUSTRALIA BANK LTD

 

  S NAB target cut by Diawa from $29 to $26.10. No decision on AXA also weighing on the stock.
3 ANZ AUST AND NZ BANKING GROUP  S Banks overall out of favour this week. We have seen very good support for WBC around $22.00 and many shorts covered around this level.
 4 FMG FORTESCUE METALS GROUP LTD S Shorting was before FY profit release. The strong result surprised the market as profit up 14% and we saw short covering as a result.
 5 WBC WESTPAC BANKING CORP  S Shorts have had the upper hand on back of weak offshore markets. Stock also downgraded to Neutral by Macquarie.