Is CBA a good buy?

[Tl9998]

Just interested to hear some perspectives for CBA at the present time?

I recently bought 100 shares at $74.30 and was attracted by the dividend growth. But since buying it, I am concerned with headwinds such as the possible mortgage crisis with a potential rates increase. Further, their future capital growth increases.

I have a long hold strategy with my shares, but this is my first bank purchase.

Thoughts?

 

[greggles]

How long do you intend to hold? One month? One year? Ten years?

It's a difficult question to answer. If you are looking at a long term hold then you'll probably be fine.

Short term is a different story. Your concerns about headwinds are well placed and there is still quite a bit of downside risk, especially in the wake of the banking royal commission.

 

[aus_trader]

It's a tough question to answer, I can only offer my perspective.

I would have considered a non banking stock that still pays dividends, such as those in Medium/Longer Term Stock Portfolio given the possible negative sentiment to the banks at the moment due to Royal Commission/Money laundering claims especially aimed at CBA.

If it had to be a bank I'd consider one of the others especially since you are aiming to hold for the longer term. This is the reason: I know that CBA holds the largest quantity of residential mortgages and if there is a crisis(as you've mentioned) or even a few defaults here and there due to an economic downturn, then which bank has the higher probability of write downs ? Something to think about.

 

[Student of Gann]

Main trend should remain up till the 29th May . Minor turning points are outlined in both models . The Dates are the same in both models but in reverse sequence . My strategy is to buy on pullbacks and enter the following day if price opens higher and validates the cycle . If price conforms to the First Curve 27th April 7th May and 20th May may represent minor pullback points and in the second Curve Minor lows could come in 27th May which is already in then the 4th and 15th May then total liquidation on the 29th May .

 

[Student of Gann]

Second Curve indicates a 7.6% decline into the 8th June with Main trend up till August 17th

 

[Garpal Gumnut]

CBA is not a good buy until it hits $25 which is good support.

It will be smashed over the next 2 years dealing with defaults on loans.

Today was a classic suckers' rally

gg

 

[Student of Gann]

Curve No 2 indicates Minor Low for the 4th May . 58.10 is 180 Deg in longitude from 62.93 Top so if price touches this level and trades higher on the Cycle date typically I would trade in direction of prevailing trend with a time and price based stop on the cycle date . The second scenario could be a Top into this date which would not be the projected outcome keeping my position neutral .

 

[Student of Gann]

Projected 4th May Low 58.10 . Actual Low 58.01 . Trend should continue up to the 7th May then drop to the 15th May where Low is indicated following Curve No 2 .

 

[Chronos-Plutus]

CBA is not a good buy until it hits $25 which is good support.

It will be smashed over the next 2 years dealing with defaults on loans.

Today was a classic suckers' rally

gg

Yes, it is difficult to be bullish on the banks at the moment. Nonperforming loans are going to skyrocket, that is a certainty.

Just for interest; for CBA to drop proportionally, as a percentage, as it did during the GFC it will need to fall to somewhere between $33 and $36.


https://www.tradingview.com/chart/CdcnnG6V/

 

[Garpal Gumnut]

Yes, it is difficult to be bullish on the banks at the moment. Nonperforming loans are going to skyrocket, that is a certainty.

Just for interest; for CBA to drop proportionally, as a percentage, as it did during the GFC it will need to fall to somewhere between $33 and $36.


https://www.tradingview.com/chart/CdcnnG6V/

Thanks mate.

And when it hits $33, we may be hit by Covid-20 or Covid-21.

I still stick with $25 as a buy point. $27 for me as I like to get set and don't bother with "buying cheapest" on day and missing out.

gg

 

[Student of Gann]

CBA on target but a spike move , I was expecting the trend to be a bit cleaner . Price 68.20 180 Deg in Longitude .

Student of Gann Posted 28th April 2020
Main trend should remain up till the 29th May . Minor turning points are outlined in both models . The Dates are the same in both models but in reverse sequence . My strategy is to buy on pullbacks and enter the following day if price opens higher and validates the cycle . If price conforms to the First Curve 27th April 7th May and 20th May may represent minor pullback points and in the second Curve Minor lows could come in 27th May which is already in then the 4th and 15th May then total liquidation on the 29th May .

 

[Chronos-Plutus]

CBA on target but a spike move , I was expecting the trend to be a bit cleaner . Price 68.20 180 Deg in Longitude .View attachment 103844

Student of Gann Posted 28th April 2020
Main trend should remain up till the 29th May . Minor turning points are outlined in both models . The Dates are the same in both models but in reverse sequence . My strategy is to buy on pullbacks and enter the following day if price opens higher and validates the cycle . If price conforms to the First Curve 27th April 7th May and 20th May may represent minor pullback points and in the second Curve Minor lows could come in 27th May which is already in then the 4th and 15th May then total liquidation on the 29th May .

CBA little pump today, I am thinking a dump now. I could be wrong though.

 

[Student of Gann]

Student of Gann

 

[Chronos-Plutus]

View attachment 103877 Student of Gann

JP Morgan have called a V shaped recovery, encouraging investors to buy banks and retail now. Make of it what you will: https://www.cnbc.com/2020/05/27/jpm...aped-recovery-so-buy-banks-and-retailers.html

 

[Student of Gann]

I notice their report was presented yesterday 66 days after the 23rd March Low with price up 25%. Classic example of Economic Commentators reporting after the fact