WBC - Westpac Banking Corporation

[alexandro]

Trade the bitch. Watch the Stochastics and MACD. Buy low sell high. Get that right and the dividend doesn't matter.

 

[nulla nulla]

WBC tested $22.00 early in the week but fell back Thursday and Friday to close on $21.50 after all the negativity coming out of Europe. With the euphoric surge on European and the U.S markets ovenight (with the djia closing on a two month high) we should realistically expect to see wbc move above $22.00 next week and test the next resistance level of $22.30 then onwards and upwards to $23.07.



The MACD chart shows the moving average closing the gap up to the share price rather than the share price retracing down to the average, suggesting wbc has bounced and is consolidating.



The RSI chart shows the moving average also closing the gap up to the share price and the share price consolidating barely in the overbought area. Volumes are slightly below average indicating some of the panic influence on turnover may have eased off.



wbc is due to declare their dividend next week and to go ex-div on 4/11/11. This should encourage a modest run-up of the share price before it goes exdiv. All in all, if the crap out of Europe settles for a week or so I expect wbc to improve significantly. Then again, if it falls back it will present yet another opportunity to trade. As always dyor

 

[tothemax6]

Trade the bitch. Watch the Stochastics and MACD. Buy low sell high. Get that right and the dividend doesn't matter.

Lol, thats one way of putting it .

 

[nulla nulla]

All in all, if the crap out of Europe settles for a week or so I expect wbc to improve significantly. Then again, if it falls back it will present yet another opportunity to trade. As always dyor

Beyond all my expectations wbc shrugged off the doom and gloomers and busted out of the downward sideways channel. The Euro rescue (still in the making), the close out of Octobers Options coinciding with the ASX crash, the likelihood of there being no interest rate cut coupling with the resurgence of the Aud$ and wbc suddenly became a must have stock.



Pity it opened at $23.50 on Friday then went south steadily all day. It sure looked good and provided an opportunity for anyone looking to lock in profits from purchasing in the recent lows.

wbc is due to announce their results and dividend next week. If they are anything like nab's, wbc should retest the $23.50+ range before going exdiv.

If they are not better then analyst expectations, the journey south will probably continue.

 

[nulla nulla]

Mr Bill Moss, Chief Economist at Westpac has demonstrated why he is the Chief Economist at Wespac by being the only person to correctly predict that the next interest rate move would be down. He copped a bagging from the other know-it-all economists at the time but has subsequently been proven to be right on the money (or interest rates as it were).

The annual results are out and the div continues to sneak higher. However, once again the analysts bagged the record result. It would seem that record results and increased dividends (fully franked) in tough times and plans to maintain the results going forward are simply not good enough for the experts.

The surge in the share price was short lived and quickly retraced to $21.00 during the week, before it rallied over $22.00 prior to the Ex-div close-off on Friday. Naturaly the share price will drop by the div and franking credit and probably open arround the $21.00 on Monday.



While I personaly feel wbc has bounced of the recent $18.00 lows and is starting a slow climb back toward $23 - $24, the lack of cohesive direction in Europe is likely to mean the journey will be slow and subject to more volitilty. I will be watching for the re-entry points and locking in any profits in the spikes. Obviously I could be completely wrong and the share price retest the low $18 - $19 range, after all I'm no Bill Moss. As always dyor and good luck.

 

[boofhead]

Are you sure it is Bill Moss of Westpac? I was thinking it could have been Bill Evans that features on the last afternoon news.

 

[nulla nulla]

You are correct, I should have said Bill Evans. I don't why I thought his name was Moss. At least I got the part of his being the Cheif Economist at Westpac correct. Moss was at Macquarie.

 

[nulla nulla]

As expected wbc fell to $21.02 after going exdiv last monday then rallied to $21.56 on Wednesday. The Euro (Italy) sovereign debt hysteria sent the global markets into a nose dive on Wednesday night and Thursday trading (our time) saw wbc get slapped back down to $20.65.

Following the interday lows from 11 October 2011 across 02 November 2011, I was looking for support in the $20.60 area and saw $20.67 as a viable (for me anway) entry point. Our market rally/consolidation on Friday combined with the rebound in Europe and The U.S.A last night should see further gains in our financials on Monday.



Now we need to monitor whether wbc is starting another downward channel with the next resistance levels arround $21.60 then $22.00 or whether the share price can continue the upward channel started arround 09 August 2011 and break above $22.80. As always dyor

 

[nulla nulla]

Started well in the Monday open and for a few minutes it looked like wbc was going to continue to climb. But it wasn't to be. WBC trended steadily down all day. The news out of Europe was all negative: Escalating bond rates; Political strife in Italy and Greece; Riots; and a major rift opening up between France and Germany as to how things can or can't be fixed.

wbc tracked down for the rest of the week breaking past the $20.60 - $20.70 level, which appeared to have been a resistance level previously and could have been a support level now. The International market closes on Friday were uninspiring and it wouldn't surprise me to see wbc test the lower channel price levels of $19.80 - $20.00 this week. If the share price can't recover from there the next support level is $18.60.



At these levels (imo) wbc is providing excellent returns through fully franked dividends. Hard to pass up as a buy for the SMSF for those with longer term confidence.

 

[nulla nulla]

There hasn't been any good news out of Europe as the sovereign debt issues continue and the lack of agreement between the Europen governments as to how to address the problems emphasise the seriousness of the situation. The likelihood of a major international credit squeeze increases.

WBC continued the share price slide through the lower channel support line of $19.80 testing $19.29 on Friday before a small rally into the close finishing on $19.50. This was a tenuous support level on September 6th. The MACD chart indicates the share price is gapping down significantly from the moving average. The RSI shows the share price deep into the oversold area. Recent volumes are only slightly higher as those jumping ship tussle with the bargain hunters.



The ftse recovered 37 points last night and the dax 64 points however the djia has been unable to hold the surge of arround 100 points and has drifted back steadily to be down 27 points at close.

IMO monday isn't looking good. If wbc can't hold or rally from here the next support levels are the interday lows of September 23, $18.61 and August 9th, $17.94. After that the support levels are back in March 2009 territory.

 

[alexandro]

Stochastics, MACD and RSI were all looking good on Friday 25th. Indicating a better entry point than any other time in the past 6 weeks. It was the time to go in heavy at under 19.50. The price behaviour on WBC is saying, "you don't have to hold me too long, just buy me when I am down under $20 and $19.50".

 

[nulla nulla]

Stochastics, MACD and RSI were all looking good on Friday 25th. Indicating a better entry point than any other time in the past 6 weeks. It was the time to go in heavy at under 19.50. The price behaviour on WBC is saying, "you don't have to hold me too long, just buy me when I am down under $20 and $19.50".

Well you are in the money.

WBC bounced off the tenative support level of $19.50 ratcheting upward throughout the week on mixed news out of Europe. On thursday the European news was better with Central Banks indicating they would buy Government bonds.

Then, on friday, Standard & Poors published their revised manner of assessing global banks. Although the Australian big 4 were revised from AA to AA- it was spelt out by Standard & Poor (and the banks) that this was not a downgrade.

The banks climbed steadily on Friday, after the release regarding the revised grading, then came the news that the U.S.A unemployment figures were better than expected. The rally in the last hour pushed wbc up to $21.45 then the closing auction saw wbc jump to close on $21.57.



Where too from here? The next levels of ressistance appear to be in the $22.00 - $22.20 area. If wbc can push through these barriers, the real challenge will be $23.60. Early christmas present or will we see a reality check and a retrace?

 

[nulla nulla]

$21.80 turned into a resistance point, then Europe imploded and wbc headed southwards. Considered as having the highest reliance of all Australian banks on overseas funding wbc paid the penalty and was savaged more so than the other 3 members of the big 4 Aussie banks.



The only glimmer of hope is that wbc held today improving to close a few cents better. Hopefully this level will prove a support point and wbc will improve upwards from this lower channel level. If it fails then the next support level is $19.50.

 

[nulla nulla]

Europe, the Christmas/New Year break, and fear of an international credit squeeze appear to have undermined confidence in the Australian banking sector with share price stuck at mid December levels.

wbc, as always, seems to get hit hardest of the big 4's in a retrace no matter how big the record profits are each year. The share price is barely above the lows of March 2009.
The only good thing, in the weak trading since 16 December 2011, is that wbc seems to be finding support arround the $20.00 mark. With good dividends and franking credits, wbc is returning almost 10% per annum which is better than bank deposit interest rate and bonds.



Only question you need to ask yourself is "Will the share price go lower and present even better rates of return?"

 

[yarrabah]

Thanks Nulla Nulla. I bought WBC in March 2009 and have dividends reinvested. Barely look at but now the reinvested dividends make up 25% of my holding. Would like to see SP higher but happy that is compounding at a low SP as it will kick off when things settle down (whenever that is). Their growth is quite good and they have improved their attitude towards customers. Thanks for the charts & words.

 

[nulla nulla]

The six month chart makes it look like wbc may have finally turned arround. If wbc can hold above the lower green channel line there is every chance it can move progressively upwards as it moves sideways. Still making excellent profits and paying dividends that are yielding returns (particularly with franking credits) that work out higher than bank interest rates.



The only problem is, the 12 month chart paints a gloomier picture and suggests that wbc needs to break through and hold above $21.50. All the post xmas talk of the pottential for a GFC2 isn't helping banks. The XAO may be forging slowly back above 4300 but I think we will need stability and some recovery in the banking sector to see it break above 4500.

 

[notting]

Probably the best buy on earth, all things balanced and considered, especially if you were buying today below 20.40 where it offered itself momentarily in a very nice manner.
That was just today however. Could be some more buying opps coming up.

US Markets are trying to grind higher despite being close to the top of the range.
It's hard to see how they will break out during an election year which will create uncertainty.
There are also some dickheads who are starting to talk up QE3 for the coming Fed meeting in two weeks. This could create another bust scenario when the Fed does nothing of the sort.
So as the chart above confirms, more buying to come which I am very very happy about!!

 

[theartglasshouse]

Do you see a possible entry point around the $19.50 mark in the next 2 months? I have set aside some has to buy some WBC and I have been watching it off late. Am hoping to get buy some ASAP but would like to get in sub $20. I like the look of WBC and think it is undervalued in my opinion. This will be a long term hold for me as the dividends attract and the price is good for one the big 4.

Still practising charting so not very good at it at the moment.

 

[nulla nulla]

Do you see a possible entry point around the $19.50 mark in the next 2 months? I have set aside some has to buy some WBC and I have been watching it off late. Am hoping to get buy some ASAP but would like to get in sub $20. I like the look of WBC and think it is undervalued in my opinion. This will be a long term hold for me as the dividends attract and the price is good for one the big 4.

Still practising charting so not very good at it at the moment.

If it drops through $20.20 it is capable of going down to $19.50 although recent activity suggests that there is support arround the $20.00 mark (Double bottom of $19.94 on December 19, 2011 and January 9, 2012.)

With the present volitilty it is capable of anything, you might be lucky.

 

[theartglasshouse]

Thanks Nulla, I will be keeping an eye on this one and might hold off at the moment and see if I can get a lower entry price. Even around $20 I would be happy with.