CBA - Commonwealth Bank of Australia

[Sean K]

I was thinking $90 was going to be where the sp might have hit before a bounce, but maybe it's already done?

 

[Sean K]

I was being greedy waiting for $90. Dammit.

 

[Sean K]

So, I guess I didn't need to be greedy, the longer term support line around $90 ish might be coming into play.

 

[Garpal Gumnut]

So, I guess I didn't need to be greedy, the longer term support line around $90 ish might be coming into play.

View attachment 136505

That would complete W2 1-2-3 of the EW Pattern.

gg

 

[CityIndex]

Now that the RBA meeting is behind us, 1H2022 earnings season will likely be the key driver of market direction over the mid-term, which gets into full swing this week with Commonwealth Bank reporting on Wednesday.

The last 6 months have included strict delta-wave lockdowns, and self-induced isolation due to the Omicron surge. Therefore, this round of financial reports will be an important reflection into how these factors impacted Australian businesses. Analysts are estimating CommBank’s FY2022 first-half earnings in the region of $4.5b.

$CBA is currently trading near support around $92, and a depending on the results, could be at risk of a downside breakout, or a bounce to help start another leg higher. However, it will also be interesting to see if it can help set the tone for the rest of earnings reports, and provide an insight as to whether we’ll see the ASX200 add to last week’s gains, or if January’s volatility is likely to continue throughout February.

All trading carries risk, but it’s definitely worth adding $CBA to the watchlist for the week and keeping an eye on how it impacts the ASX200.

 

[divs4ever]

Net profit after tax $4,741m $4,746m
Statutory NPAT Cash NPAT ▲ 26% on 1H21 ▲ 23% on 1H21
NPAT was supported by strong business outcomes, reduced remediation costs and lower loan loss provisions due to an improved economic outlook but impacted by lower margins

Dividend $1.75 Per share, fully franked ▲ 17% on 1H21
The interim dividend was $1.75 per share, fully franked. This represents a normalised cash payout ratio of ~70%, in line with the Board’s interim target payout ratio normalised for long run loan loss rates.

Net interest margin 1.92% ▼ 17bpts on 2H21
▼ 14bpts on 1H21
▼ 9bpts excl. liquids on 2H21
▼ 5bpts excl. liquids on 1H21
Excluding the impact from increased lower yielding liquid assets, the Bank’s net interest margin (NIM) decreased 5bpts due to increased switching to lower margin fixed home loans, the impact of the rising swap rates due to market expectations of higher interest rates, and continued pressure from home loan competition.

DYOR

my exposure to CBA is via various LICs and ETFs

after the market reaction to the SUN report yesterday , this could do anything

 

[Sean K]

My Dad's going to be happy today. He got a few in the IPO and hasn't sold any yet.

 

[qldfrog]

I expect the usual exuberant Oz market going up at least till midday, after when overseas traders and bots strat running, might lose a bit of initial upside..viewing from far, do not own

 

[CityIndex]

CommBank’ stock is up close to 5% in early trade, in-line with its 5% beat on 1H profit estimate.

$CBA formed a double bottom near support at $92, and is now testing the key $99 resistance. Closing above this level could allow it to test a confluence of resistance around its 200-day MA and the downward slopping trendline coming from its November highs, opening possibility for a larger breakout.

However, the stock has already been testing support at its 50-day EMA today, and could be at risk of closing below if traders who accumulated shares around the $92 support look to take profits around this key level. If $CBA is rejected at around the current levels, it might end up making another leg lower back towards support.

All trading carries risk, but it could be worthwhile keeping CommBank on the watchlist for now.

 

[peter2]

CBA is back at it's recent $92 support level. The series of lower highs portends lower prices. I wouldn't expect much lower though as the $90 level should provide more support as well as the prospect of rising interest rates. I'll place it in my reversal watch list but it's not ready yet.

Weekly chart showing support and prior AT buy pattern.

 

[Sharkman]

if i didn't already have a CBA position on my books (that i took on in dec to strip the div) i'd be sorely tempted to sell the $92 mar puts here. with stock at around $93 those were fetching around $1.90 at the mid for 2.5 weeks to expiry. almost like getting paid an extra (unfranked) div if one doesn't mind taking delivery at $92.

IV is quite elevated at just shy of 30, and interestingly all 4 of the majors are showing similar IVs around the 28-29 level for mar slightly OTM puts. normally CBA trades at noticeably lower vols to the other 3, but these are not normal times.

 

[rnr]

Does anyone else think that CBA is about ready for a move down from these current levels?

 

[Gunnerguy]

if i didn't already have a CBA position on my books (that i took on in dec to strip the div) i'd be sorely tempted to sell the $92 mar puts here. with stock at around $93 those were fetching around $1.90 at the mid for 2.5 weeks to expiry. almost like getting paid an extra (unfranked) div if one doesn't mind taking delivery at $92.

IV is quite elevated at just shy of 30, and interestingly all 4 of the majors are showing similar IVs around the 28-29 level for mar slightly OTM puts. normally CBA trades at noticeably lower vols to the other 3, but these are not normal times.

Currently short some April $92 puts. Sold them around 10th March. I may BTC and roll up to $94/$96/$98 for May.
Gunnerguy.

 

[Sharkman]

Currently short some April $92 puts. Sold them around 10th March. I may BTC and roll up to $94/$96/$98 for May.
Gunnerguy.

seems sensible. had a quick look at the market today and skew seems rather steep though - MM was showing 0.13/0.24 on those apr 92 puts when i checked a short while ago, that's 35'ish IV. the apr 106 puts (slightly OTM) were only 22 IV (and that in itself is already substantially elevated, CBA tends to hover around 12-13 in "normal" times), so it will be expensive (in vol terms) to close. might still be worth doing anyway if you took in >1.00 originally, it'll secure 80% of the max gain and get the risk off your books.

 

[CityIndex]

Does anyone else think that CBA is about ready for a move down from these current levels?

It wouldn’t be surprising to see some profit-taking after such a steep rally, and given the stock’s inability to hold above $108, it could face rejection and turn lower once again.

However, there does also seem to be decent support around $106, so it might need to close below this level on elevated volume to open the possibility for a deeper pullback.

All trading carries risk, but it should be interesting to watch how $CBA trades for the remainder of this week.

 

[Sharkman]

It wouldn’t be surprising to see some profit-taking after such a steep rally, and given the stock’s inability to hold above $108, it could face rejection and turn lower once again.

agree, it did get rejected at these sorts of levels a few times last year, i'm also looking for a moderate pullback.

i sold the jun 100 puts last week for about a 2.25% premium. nothing fancy, just a no frills trade, as i may have to leave it unmonitored for a while due to some real life stuff coming up, so wanted a position that can be left sitting there decaying away without having to worry too much about it exploding my account. don't mind if it gets assigned, then i reacquire the stock position that was called away a couple of weeks ago at the same 100, in time to strip the aug div.

 

[Porper]

View attachment 139555

Does anyone else think that CBA is about ready for a move down from these current levels?

I am looking for another leg up to the target shown....as a minimum. Funny how almost all the brokers have CBA as their least preferred big bank. Longer term, it's looking good still i.m.o. I prefer Westpac short to medium term...has better patterns for me.

Disclosure: I hold WBC

 

[rnr]

I am looking for another leg up to the target shown....as a minimum. Funny how almost all the brokers have CBA as their least preferred big bank. Longer term, it's looking good still i.m.o. I prefer Westpac short to medium term...has better patterns for me.

Disclosure: I hold WBC

View attachment 139645

Hi @Porper,
Many thanks for sharing your analysis as it is always appreciated. Setting my charts to open up with a larger time-frame (say 2 years) would certainly help! Hopefully your family & work colleagues have remained safe during the COVID pandemic.
Regards, Rob

 

[Porper]

Hi @Porper,
Many thanks for sharing your analysis as it is always appreciated. Setting my charts to open up with a larger time-frame (say 2 years) would certainly help! Hopefully your family & work colleagues have remained safe during the COVID pandemic.
Regards, Rob

All good here in NZ Rob thanks. Hope all your clan are ok and that you are making some bucks on the markets.

 

[Sharkman]

Funny how almost all the brokers have CBA as their least preferred big bank

yeah i'm a bit confused by what i'm seeing too. i was looking at some 1 month 25'ish delta puts across the big banks today in considering a possible trade along those lines, and strangely CBAs were sitting 2-3 vol higher than the other 3, they were around 23 whereas NAB/WBC were about 20 and ANZ about 21.

usually it's the other way round, CBA is traditionally the lowest beta of the big 4, in "normal" times CBA typically sits around 12-13 and the other 3 hover around 14-15. not sure what's going on. do they know something we don't, or is this just an excellent opportunity to rack up some good decay for relatively low risk?