WBC - Westpac Banking Corporation

[nulla nulla]

Westpac reports a profit of Billions, the analysts determe that it is $100m less than their expectations and the price drops 12.5%. You have to wonder if they make negative comments to push the price down so they can stock up. The level of shorting over the past three days has been high also.
The chart shows a down trend over the past few months with the current price at the lower part of the channel. Is it due for a bounce or looking to break out downward?

 

[nulla nulla]

The ASX lists of shares shorted on the market showed: for Monday 23-08-10 that 24% of the volume of wbc shares traded were short sales; and on Tuesday 24-08-10 the volume of wbc traded as short sales was 38%. The figures for yesterday will not be available until after 11:00am this morning.

The patern of trading appears to be that the share price is sold down quickly, then a large amount turns over, over a longer time span appearing to stabilise the price. Then the share gets sold down again before the close, with a large amount turning over in the closing auction with the share price closing near the daily lows .

Banks clawed back some of their value on the djia last night. It will be interesting to see if banks can recover any of their value on the Australian market today.

 

[No Gain]

I'm hoping they claw back and don't drop down further. I bought in on the 29th of July at $24.27 so not at all happy with this shorting that is going on at the moment. Hopefully buyers start coming back in soon!

 

[skyQuake]

The ASX lists of shares shorted on the market showed: for Monday 23-08-10 that 24% of the volume of wbc shares traded were short sales; and on Tuesday 24-08-10 the volume of wbc traded as short sales was 38%. The figures for yesterday will not be available until after 11:00am this morning.

The patern of trading appears to be that the share price is sold down quickly, then a large amount turns over, over a longer time span appearing to stabilise the price. Then the share gets sold down again before the close, with a large amount turning over in the closing auction with the share price closing near the daily lows .

Banks clawed back some of their value on the djia last night. It will be interesting to see if banks can recover any of their value on the Australian market today.

Think you are reading that wrong - the asx report shows total short sold; Not daily short sold.


WBC

Date Total SS
23/08/2010 3,068,802
24/08/2010 5,196,805
25/08/2010 2,758,760

ie, 3mil shorts were covered yesterday.

 

[Garpal Gumnut]

A Flag in a Downtrend, Trading range, could be a problem for the bulls.

gg

 

[nulla nulla]

Think you are reading that wrong - the asx report shows total short sold; Not daily short sold.


WBC

Date Total SS
23/08/2010 3,068,802
24/08/2010 5,196,805
25/08/2010 2,758,760

ie, 3mil shorts were covered yesterday.

While showing my ignorance, what is the difference? The asx report is for the number of short sold shares on the preceding day, which I read as the "daily" total of shares shorted on the nominated day?

 

[3aq1e]

How much longer do people think bank shares will continue to decline.. particularly wbc.

 

[nulla nulla]

With the politicians filling time playing "lets kick the banks arround" and the "know-it-all overseas economists" saying "lets impose stricter regulations on all banks" it isn't surprising to see the market price getting pushed down again.
However at what point will the market decide they are becoming a bargain?

wbc has the best price earnings ratio atm, just posted another record profit and increased the dividend which is fully franked. On Friday 12/11/10 the price was in the range $21.80 to $22.16. The ASX shows the level of wbc shares being shorted on a daily basis for Wednesday 10/11/10 was over 40%.

Assuming the shorters have pushed the price down to accumulate, can we expect to see it bounce from here or will it continue down to test the $21.00 support level?

 

[nulla nulla]

wbc seemed to be maintaining a tenacious grip on the price range $21.80 - $22.00 and after the bounce in Europe overnight and the U.S I was half expecting a lift in the share price above $22.20.

So it came as a bit of a surprise when wbc fell to an interday low of $21.50 before closing on $21.62. With the resurfacing of the European Sovereign debt issues don't be surprised if wbc tests $21.00 or lower next week.

 

[oztrades]

Every picture tells a story...
any number of reasons could explain the banks plights at the moment... from mortgage stress to unbelievable profits, however my theory is that the banks arent being supported because the insto's have to make the QRN float work so they have been pulling profits.

 

[So_Cynical]

Apparently there is alot of international money shorting the banks as a proxy for Aussie housing...as the housing bubble deflates so will the bank stocks that have 70% of there money in Aussie housing.

 

[TraderMM]

I have a theory on the reason why the banks are down, including WBC, and it has nothing to do with fundamentals.

Earlier this year the IMF put out a report saying that aussie housing is some of the most expensive in the world. Consequently US based funds concluded there is an imminent property crash here and decide to short aussie banks. Unfortunately for them not only is there little or no likelihood of a property crash here, our banks are strong, have reported great profits, paid good dividends, and the AUD has moved up against the USD big time. Their short positions are way out of the money. In the meantime these funds are desperately trying to talk down the banks. Recently there were reports in the financial media about overseas investors attempting to set the seeds of doubt by asking Fitch to stress test aussie banks. There has been a huge weight of speculative overseas money on the short side of the banks. No wonder they are down.

I know this sounds like a bit of a conspiracy theory but has anyone else made similar observations?

 

[So_Cynical]

Unfortunately for them not only is there little or no likelihood of a property crash here, our banks are strong, have reported great profits, paid good dividends, and the AUD has moved up against the USD big time.

Its a popular call...people said the same thing a few years back in Ireland, Spain, Japan, the US and most of Europe and of course they were very wrong, some say "but its different here" and what about "supply and demand" etc etc.

Those factors didn't work in the rest of the world and they wont work here...bubbles are unsustainable its a fact, the Aussie banks are massively exposed to housing and ready to take a tumble.

 

[YELNATS]

Its a popular call...people said the same thing a few years back in Ireland, Spain, Japan, the US and most of Europe and of course they were very wrong, some say "but its different here" and what about "supply and demand" etc etc.

Those factors didn't work in the rest of the world and they wont work here...bubbles are unsustainable its a fact, the Aussie banks are massively exposed to housing and ready to take a tumble.

Assertions, assertions. You may be correct and it's all very well to assert this, but do you have evidence to back up your assertions?

I'm a prospective real estate buyer in 2011, so I'm very interested in your justifications.

 

[sptrawler]

Well the only OBVIOUS thing that can cause a housing collapse is people not being able to meet their payments. This would only happen if there was an increase in job losses and at this point in time this would only occur if China reduced it's demand for our resources.
It could be argued that the U.S, U.K and Europe, who are the biggest consumers, are in recession and therefore not purchasing as many Chinese products. Also many believe the Chinese could pull the rug on infrastructure spending. If this happened it would not only be the banks that cop a beating all our stocks would be trashed.

 

[ginar]

THis may or may not be responsible for weakness in bank stocks here , likely a combination of a few things , rate rises here , euro zone soveriegn debt issues . ........... bank index in US has been stuck in a range for near on 7 months , could break either way

http://www.reuters.com/article/idUS...Opening+Bell&utm_campaign=10Thing_NL_11222010

 

[nulla nulla]

Downward channel as discussed in chat. The lower bar starts Sept 16 to Nov low, upper bar is parralel to that.

 

[ginar]

Downward channel as discussed in chat. The lower bar starts Sept 16 to Nov low, upper bar is parralel to that.

yeah easier to see in picture form no doubt , mine here is showing the slightly older alternative TL resistance . its certainly is approaching a point to watch

 

[dougy]

For my 2-bob's worth, the medium-term view seems to hint at a continuing gradual decline.

Price on the weekly chart seems to meander between $21 and $24.
Meantime, 39-bar Stochastic shows WBC in a medium-longterm decline, and Relative Strength Comparison against weekly XAO is clearly below par.

Will endeavour to upload a weekly chart.

 

[nulla nulla]

I have overlaid the downward channel over the corresponding RSI chart. Todays price action shows an upward breakout from the upper channel bar.

IMO the RSI chart suggests the price is venturing into the overbought area as it has gapped up from the moving average price. However given its recent fluctuation between $21 - $24, I wouldn't be surprised to see it go a little higher.



The MACD chart also shows that the price has gapped upward away from the moving average. Volume of turnover is fairly good and the recent news effecting the share price has improved from the constant bashing bank stocks were receiving.



The moving Averages chart appears to indicate a revesal from the downward trend. Fingers crossed.