WBC - Westpac Banking Corporation

[blue0810]

Westpac is due to provide a quarterly update today. Should be interesting.

No good News -> WBC -4.00% so far.

 

[notting]

Maquarie thought it was on par.

 

[notting]

Good day of discounting today.
Might take a big bite in the morning if markets are soft tonight.

Amazing how the press have managed to flavor the current bounce as being positive expectations from the meeting between Sarkozy and Merkel.

Setting it all up for another thrashing.

What is anyone expecting from that meeting accept flimsy share holders thinking some miracle is about to occurr or not occur.

7 used to run the line "First we make the news, then we break the news."

Hay will be made.

 

[nulla nulla]

An overview of the report from Westpac by "Eric Johnston" in todays Sydney Morning Herald "Business Day" is worth a read at the following link.

http://www.smh.com.au/business/westpac-counts-profit-cuts-staff-20110816-1iwex.html

While their income is down for the last quarter (you would think it would be a given, having a slow down in income if people are cutting borrowing and increasing savings) their full year profit is on track for another record $6.54 billion, only $300 million less than their juggernaut rival the CBA.

Naturally, the market (including the friendly international hedge funds) pushed the price down ridiculous levels. Bloody funny if you ask me. WBC is on track to post a record $6.54 billion profit and the market is saying "That is less than expected" and sells the share price down toward March 2009 GFC levels.

And of course the fully franked dividend/yield just gets better and better.

 

[oldblue]

I don't think it's got much to do with WBC.

More a case of market nervousness and holders taking the opportunity to sell on what they hoped would be a relatively firm market following a good report, ie what the brokers call "profit taking".

 

[kid hustlr]

A couple of heavy days and its not impossible for WBC to hit that $18.00 mark again.

Nulla, any changes of opinion given the recent profit announcements of Westpac on your long term view of this?

 

[alexandro]

Market is at a pivot point. Top big caps CBA, WBC and BHP have moved back up to the 20 day moving average from recent plunges and pullbacks. In the next 1-2 days, it’s either a strong move up (starting a rally) or the down trend resumes. It can be either at equal chance but owing to that huge reversal 2 weeks ago, the stance and posture on the charts look to the upside. I don’t see reason for the downtrend to continue at this time. The market has already gone through in the past 4 weeks and completed its shock for now. All in stages.

 

[nulla nulla]

A couple of heavy days and its not impossible for WBC to hit that $18.00 mark again.

Nulla, any changes of opinion given the recent profit announcements of Westpac on your long term view of this?

No change of opinion. IMO Market sentiment is trying to push wbc down below realistic values. All we can do about it is trade the opportunities when we see them and are cashed up.

 

[nulla nulla]

The share price trend suggests thay wbc is tapping the upper channel bar. If it can break above $21.00 and stay there it may start to improve to where it realisticaly (IMO) belongs, $22.50+.



However the MACD suggests the price is gapping upward from the moving average. How long can wbc sustain this?



The RSI suggest that wbc is moving into "oversold" territory. No doubt the "herd" that follows these indicators will start to bail out and push the share price back down making the charts self-fulfilling, or will they?



As always. DYOR & goodluck. Maybe volumes are the key?

 

[nulla nulla]

Two weeks ago the market had to make a decision. Could wbc run up higher or was it due to retrace from the top of the downward channel. Well the market bailed and wbc tracked down to the bottom of the channel arriving there at close today.



Now the market has to make another decision. Is it time for wbc to bounce or is it going to trend further down and breakout below the channel line?

You tell me. I thought wbc was good value at $21.50, even better at $20.50, amazing at $19.50 and will probably be incredible at $18.50, $17.50 and $16.50.

 

[alexandro]

In the past when the ASX has taken a sudden and significant fall, as was the case in the week of 9 August, it has bounced back up just as quick but only to return to the same lows and even lower in the weeks ahead. It was only then that a rally of some substance started.

The decline of the ASX since its April highs has had no significant relief rally yet (something lasting more than 6 weeks. There has been small and short bounces enough to propel WBC a maximum of $2 but nothing more.

Although a revisit to 9 August lows is possible, I feel a rally of the ASX back to around at least 4600 is coming. 1. Based on the absence of such a rally so far, after a 700-800 pts fall of the ASX and 2. Markets usually do well November to January (time is right).

If a revisit and re test of 9 August is going to happen, it should happen inside of the next 2 weeks. If not, then the relief rally should start, taking WBC back to at least 21.60 - $22.

This is not the time to be too pessimistic. The price of WBC with fear priced in is cheap at under $20, the price without fear is too expensive at $22+.

 

[nulla nulla]

Two days after my last post wbc surged up to midway in the channel. However the next five days has seen wbc return to the bottom of the channel. The driving negative factors being the expected credit squeeze as a result of the European sovereign debt crisis and the ongoing debacle between the Democrats and the Republicans in the U.S.

There was a good article in the S.M.H in respect of the exposure of Australian Banks to the sovereign debt of Greece (Minimal) and Italy (much the same) so it appears much of the negativity is the international hedge funds gambling on the forthcomming Australian Property Market collapse (don't hold your breath).

Meanwhile, wbc is again testing the bottom of the channel. Your call. Do you think it is about to break out, downwards? Or is wbc ready for another bounce? DYOR.

 

[alexandro]

If we had spent the 5 minutes to put a simple ruler up against the screen during 2007, we would have seen the credit fuelled deviation from the natural 27 year growth trend of Australian shares and the correction to come.

Going by historical corrections (or over-corrections), looks like we have some way to go yet. It looks like XAO (All Ords) to 3700 or 3800 if we are lucky.

But in fact, the long term growth trend suggests the XAO has already gone too far down and we should be at 4600 right now.

It means the correction is going to take its course regardless of undervalue and the overcorrection. It means that if you simply ignore everything thats happening and hold at these levels, the price will come back and you will be ok.

It just means you were late and missed the bus and the bus will just take time to go around and come back to pick you up.

 

[skc]

If we had spent the 5 minutes to put a simple ruler up against the screen during 2007, we would have seen the credit fuelled deviation from the natural 27 year growth trend of Australian shares and the correction to come.

Going by historical corrections (or over-corrections), looks like we have some way to go yet. It looks like XAO (All Ords) to 3700 or 3800 if we are lucky.

But in fact, the long term growth trend suggests the XAO has already gone too far down and we should be at 4600 right now.

It means the correction is going to take its course regardless of undervalue and the overcorrection. It means that if you simply ignore everything thats happening and hold at these levels, the price will come back and you will be ok.

It just means you were late and missed the bus and the bus will just take time to go around and come back to pick you up.

Over such long periods and change in pts value a log scale is may be more appropriate?

 

[craft]

Over such long periods and change in pts value a log scale is may be more appropriate?

Starting dates can also distort the picture – best to draw conclusions from as long a period as possible.

 

[nulla nulla]

Financials rallied hard today, wbc up 5%. Looked like a few shorters may have elected to close out their positions and lock in profit rather than risk it all on the outcome of the G20 actually being able to get their act together.

wbc is still tracking in the sideways/downward channel. I wouldn't get to confident yet that it has turned arround and will head for blue skies. Dropped two parcels today (picked up at $18.87 and $18.84) and will watch for any retrace / re-entry oportunities.

 

[alexandro]

I'm happy with that as being a decent rally. It gave plenty of chance for all to purchase at around $19, then sell at around $21. A $2.00 trade.

Buy 60,000 of them around 21-23 September (the days of my post) and sell on 7 October to collect 120k and take a few years off travelling, having sex and eating seafood.

 

[alexandro]

Cancer preventative or offsetting, life extending activities.

 

[nulla nulla]

I'm happy with that as being a decent rally. It gave plenty of chance for all to purchase at around $19, then sell at around $21. A $2.00 trade.

Buy 60,000 of them around 21-23 September (the days of my post) and sell on 7 October to collect 120k and take a few years off travelling, having sex and eating seafood.

I dont think everyone has $1.2 millon to invest in one share for a two week trade. I could have a decent holiday on the brokerage alone.

 

[nulla nulla]

For the moment wbc appears to have broken out of the downward channel. The next level of resistance appears to be $21.60 and then $22.24. wbc will go exdiv next month so there is every possibility that it will creep upwards on low volumes. Naturally a lot of holders will be trading any runup selling into the rises along with long term holders choosing to get out at the better price levels. Others may be trying to buy in for the div.



The MACD chart shows wbc starting to gap up from the moving average and (imo) the volumes pushing the price up suggest there could be a few days more appreciation to
come.



However, the RSI chart shows that wbc is moving into overbought teritory and it could easily become a sell off. The moving average does appear to have turned upwards. If it can continue a slow climb the rsi may hold at these levels and the spike/sell off be averted.



In this market it is a hard call. Do you buy in looking for the div (and franking credit), Do you trade the swings and forget any long term prospects or do you try a bit of both. DYOR & goodluck