tech/a
No Ordinary Duck
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WOW - Woolworths Group
- Thread starter Ko Ko
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It's got nothing to do with the outcome. It's about the process. Even you know that.
Trundling out a line that's been used by real estate agents since Jesus was playing fullback for Bethlehem as evidence of a market that has topped is just ridiculous.
tech/a
No Ordinary Duck
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Your like a school bully Mc Muffin.
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WOW!
This appears to have become a banter thread.
I don't normally have much to contribute to this thread these days as it's been a very long time since I last traded WOW (or any other ASX share, for that matter), but I did receive an email last Thursday offering me a gift card provided I spent a certain amount of money in their store. The offer was due to end today. I can but speculate as to the reason for this offer. Some of my thoughts, (presuming the offer was made to a large proportion of their customer base), are perhaps there was a need to boost end of month sales figures or maybe there was a need to address a near term cash flow hiatus.
Perhaps some of the FA enthusiasts here could shed some light?!
This appears to have become a banter thread.
I don't normally have much to contribute to this thread these days as it's been a very long time since I last traded WOW (or any other ASX share, for that matter), but I did receive an email last Thursday offering me a gift card provided I spent a certain amount of money in their store. The offer was due to end today. I can but speculate as to the reason for this offer. Some of my thoughts, (presuming the offer was made to a large proportion of their customer base), are perhaps there was a need to boost end of month sales figures or maybe there was a need to address a near term cash flow hiatus.
Perhaps some of the FA enthusiasts here could shed some light?!
Um.
The point is that WOW to $10 - according to rimtas - was not an actual "call" as you put it, but rather a private behavioural experiment (with us as the subjects), to gauge sentiment by throwing out a crazy number.
In case you missed it:
Either that, or rimtas is making up stories about sentiment testing to cover his "call". I dunno. What do you think?
As an aside, I find it pretty amusing how personally you took the response to rimtas Pavlovian admission, as an attack by "fundamental wolves" on the precious Elliott Wave, when the group of people you're lumping together are about as disparate in their views as the anyone on the forum. I'd never be in a wolf pack with Value Collector!
I reshuffled my tea leaves I tried again, as someone here suggested, but they still can’t catch on the popular opinion and indicate a bizarre options for WOW and market overall. So I think I will be changing strategy and from now on I will use a coffee grounds as a basis for a forecast. I think from there you can take me seriously.
And believe me-the forum is a powerful tool to gauge a sentiment. People are herding, they do not know where the market is heading. Their only ground to assume the direction is from reading, hearing and seeing what others are doing, expecting that they somehow "know".
Re real estate agents-they are public figures, and their opinion and selling strategies are also a good addition to the events that all combined gives you a grasp on sentiment in the realestate market. This market is no different from share market. When the consumption item becomes an investment item, it is prone to boom and bust cycles. Determining the top is not easy, but it is not going the separate path from the stock market-they are like twin brothers. If stocks are heading in Wave C below 2009 lows, means that realestate has toped as well and there won’t be higher prices anymore. Realestate agents are like share analysts and their overall opinion is important, because they make money from selling. The more they sell, the more money they make, more complacent about this market they get.
I am not calling WOW at $10, it is not the right time for this. Probably the right time will be when WOW will be at $12. It is the same like now-forecasts to $23 do not scare people. But they would have scared when WOW was $39. If you tried to say that WOW will be $23 just a year and a half from now, you would have been stoned.
Just take a look at this chart and think, where WOW will be, when All Ords will be at 4000(again, I avoid saying 1000, as this needs to be dosed in smaller increments). Does this wave from the Top looks like it is searching for bottom?
nulla nulla
Positive Expectancy
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Woolworths has not had a very good year, dropping from a high of $36.00 on 31 October 2014 to testing $25.10 yesterday. A fall of $10.90 (30.28%) in less than 12 months.
With Woolworths going ex-div today it is likely there will be a further fall of the div ($0.72) or even more if the franking credit is taken into calculations. Then again, there could be a rally. Global markets rallied overnight and locally the All-Ords has been well supported at the 5000 level.
Yesterday, Woolworths managed to close on $25.33 with 15% of the days turnover in the closing auction lifting the price to $25.33 from low $25.20's. Being the last day of trading cum-div yesterday, there is always an element of the market (mostly overseas investors) selling off as the franking credits are of no use to them. They often opt out, buying back in the next day on the ex-div plunge.
At yesterdays close the div of $0.72 represented a yield of 2.8%. Fully franked the gross div is $1.028 which represents a yield of 4.06% (annual yield of 8.12%). This level of yield would/should be fairly attractive to self managed super funds, particularly those in pension mode. Their SMSF gets a tax refund of the franking credit, and if they are over 60 they pay no tax on their pension from the SMSF. In my opinion, Woolworths at these price levels is a little bit like Telstra below $3.00. A spec buy and hold. If it rallies from here it has the capacity to generate a 30% plus capital gain and provide an annual return on capital invested of 8%. Then again if it doesn't rally from here I will have egg on my face. Good thing I like egg.
Disclaimer: I picked up a further parcel yesterday at $25.14.
With Woolworths going ex-div today it is likely there will be a further fall of the div ($0.72) or even more if the franking credit is taken into calculations. Then again, there could be a rally. Global markets rallied overnight and locally the All-Ords has been well supported at the 5000 level.
Yesterday, Woolworths managed to close on $25.33 with 15% of the days turnover in the closing auction lifting the price to $25.33 from low $25.20's. Being the last day of trading cum-div yesterday, there is always an element of the market (mostly overseas investors) selling off as the franking credits are of no use to them. They often opt out, buying back in the next day on the ex-div plunge.
At yesterdays close the div of $0.72 represented a yield of 2.8%. Fully franked the gross div is $1.028 which represents a yield of 4.06% (annual yield of 8.12%). This level of yield would/should be fairly attractive to self managed super funds, particularly those in pension mode. Their SMSF gets a tax refund of the franking credit, and if they are over 60 they pay no tax on their pension from the SMSF. In my opinion, Woolworths at these price levels is a little bit like Telstra below $3.00. A spec buy and hold. If it rallies from here it has the capacity to generate a 30% plus capital gain and provide an annual return on capital invested of 8%. Then again if it doesn't rally from here I will have egg on my face. Good thing I like egg.
Disclaimer: I picked up a further parcel yesterday at $25.14.
PZ99
( ͡° ͜ʖ ͡°)
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No egg for you
I bought @24.95 and sold @25.25 today. Probably could've done better though
I bought @24.95 and sold @25.25 today. Probably could've done better though
Well, doesn't make much sense to get 30% less capital at year's end with only 8% offset to this loss.
Cash does much better, or to be exact, about 10 times better(-22% loss vs +2,5% gain).
There is though a nice probability to one more bottom, maybe even tomorrow , which will provide a good trade if confirmed. I'll be looking for signs of trend change and deploy some bucks if 5w from the bottom develops intraday. Maybe this time I'll manage to get more than 5% from the market.
nulla nulla
Positive Expectancy
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For some silly reason I actually expected better from you than a cut and chop mis-quote to take the entire post completely out of context.
.
No, I understood your point. For those who never ever expect to claim principal, this yield is quite good. Buy WOW and forget till you die. In 10 years you should get your principal in form of dividends, and the rest is pure gain.
But for the rest who want to use this money somehow, buying in downtrend just doesn't make any sense. Try to wait at least for 5 waves up on daily time frame, before acting with long term expectations, because any stock could fall further than one can calculate or anticipate. Even biggest conglomerates fall one day. And WOW is expanding it's Masters chain, draining cash and expecting property bubble to continue. I smell a big trouble ahead if this strategy won't be changed.
Staying on retailer side is good, but if you step a foot into property market in any way, you are exposed to it's boom and bust cycles. Ditching Masters would be so good for WOW, that it's share price will skyrocket. Property has already turned, and I hope new CEO will see this.
But for the rest who want to use this money somehow, buying in downtrend just doesn't make any sense. Try to wait at least for 5 waves up on daily time frame, before acting with long term expectations, because any stock could fall further than one can calculate or anticipate. Even biggest conglomerates fall one day. And WOW is expanding it's Masters chain, draining cash and expecting property bubble to continue. I smell a big trouble ahead if this strategy won't be changed.
Staying on retailer side is good, but if you step a foot into property market in any way, you are exposed to it's boom and bust cycles. Ditching Masters would be so good for WOW, that it's share price will skyrocket. Property has already turned, and I hope new CEO will see this.
tinhat
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It could be a dividend trap. Lincoln Indicators dropped it as a recommended income stock reeling off a whole list of challenges, headwinds and disappointment at the lack of turnaround strategy. I sold the other day and put the money into PPT.
This time no more "market testing". Real post with real analysis, money making machine without any emotions.
So as anyone can see in the last page I pointed out that Expanding Leading Diagonal could be at works. I put my money on that count as it was worthy setup with double confirmation at two different degrees of trend, win win situation. Original post is here:https://www.aussiestockforums.com/forums/showthread.php?t=3539&p=875210&viewfull=1#post875210
But what happened next was most important.
Leading Diagonals of any kind usually produce a "thrust" like any Triangles, so I expected one but none happened, instead market did some movements that were not supposed to be there for a "thrust". So my instinct told me to get out, I took 5,5% profit from that trade and stepped aside.
The most important thing with WOW is that it moves in Threes from 2014 top, so last trade was based on this, and market reacted to the setup at the bottom. But there appears that larger forces of even bigger pattern are in progress, so new lows followed. As anyone can see, another "three" has just bottomed, so it is worth looking for entry.
Looking at the whole picture Expanding Diagonal simply converted into Contracting one. I don't know many patterns which can move in "threes" within converging(or expanding) lines, but overall internal motive subdivisions just don't stick as "fives". So most likely WOW just sported a massive almost 1,5 year lasting Contracting Leading Diagonal as the first leg of decline within bigger corrective pattern, assume that it is Primary Wave A(circled).
Now what happens will be most important. Basically it should produce a "thrust", an Impulsive advance, usually retracing 50-80% of the pattern, giving as target in 30-35 range. In this case it should sport Three waves, probably that will extend into 2016.
I added the DAX(Germany) chart, that sported Leading Diagonal from the top and how a "thrust" unfolded later, just to gain some perspective what should happen and what to expect.
As on a Daily chart last subdivisions of wave (5) looks a bit small, I added one more possibility of how scenario could unfold if rally won't start from here. It simply must sport Three waves from wave (4) top.
Interestingly, if you allow 7 more weeks for this scenario to unfold, it produces a Fibonacci numbers, that could be seen if each 'top to top' cycle was deducted from the previous one, making (3)+(4) waves shorter in 21w than (1)+(2) cycle and after about 7 weeks waves (4)+(5) would be shorter in 13w to the bottom, which could extend to around $22 in price.
Of course nothing of this could make any case, but sometimes fib numbers appear in one form or another. Wave structure is as always, the key. Well, the massive RSI divergence(not shown) that started from wave (1) bottom, can be found only when Diagonals are progressing. It just can't be ignored, as technical conditions like this indicate a turn when waves are ready to make one.
I would describe the overall situation here as "stretched".
So as anyone can see in the last page I pointed out that Expanding Leading Diagonal could be at works. I put my money on that count as it was worthy setup with double confirmation at two different degrees of trend, win win situation. Original post is here:https://www.aussiestockforums.com/forums/showthread.php?t=3539&p=875210&viewfull=1#post875210
But what happened next was most important.
Leading Diagonals of any kind usually produce a "thrust" like any Triangles, so I expected one but none happened, instead market did some movements that were not supposed to be there for a "thrust". So my instinct told me to get out, I took 5,5% profit from that trade and stepped aside.
The most important thing with WOW is that it moves in Threes from 2014 top, so last trade was based on this, and market reacted to the setup at the bottom. But there appears that larger forces of even bigger pattern are in progress, so new lows followed. As anyone can see, another "three" has just bottomed, so it is worth looking for entry.
Looking at the whole picture Expanding Diagonal simply converted into Contracting one. I don't know many patterns which can move in "threes" within converging(or expanding) lines, but overall internal motive subdivisions just don't stick as "fives". So most likely WOW just sported a massive almost 1,5 year lasting Contracting Leading Diagonal as the first leg of decline within bigger corrective pattern, assume that it is Primary Wave A(circled).
Now what happens will be most important. Basically it should produce a "thrust", an Impulsive advance, usually retracing 50-80% of the pattern, giving as target in 30-35 range. In this case it should sport Three waves, probably that will extend into 2016.
I added the DAX(Germany) chart, that sported Leading Diagonal from the top and how a "thrust" unfolded later, just to gain some perspective what should happen and what to expect.
As on a Daily chart last subdivisions of wave (5) looks a bit small, I added one more possibility of how scenario could unfold if rally won't start from here. It simply must sport Three waves from wave (4) top.
Interestingly, if you allow 7 more weeks for this scenario to unfold, it produces a Fibonacci numbers, that could be seen if each 'top to top' cycle was deducted from the previous one, making (3)+(4) waves shorter in 21w than (1)+(2) cycle and after about 7 weeks waves (4)+(5) would be shorter in 13w to the bottom, which could extend to around $22 in price.
Of course nothing of this could make any case, but sometimes fib numbers appear in one form or another. Wave structure is as always, the key. Well, the massive RSI divergence(not shown) that started from wave (1) bottom, can be found only when Diagonals are progressing. It just can't be ignored, as technical conditions like this indicate a turn when waves are ready to make one.
I would describe the overall situation here as "stretched".
Wysiwyg
Everyone wants money
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Common tators rave about Aldi being a an issue with WOW. Crocker dung. Aldi might have some stores in the capital cities but the rest of Aust. wouldn't know who they were. Aussies are faithful shoppers.
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That may be so. But I think the days of WOW earning 20%+ returns on capital by just continuing to do what it has done are over. It is an iron law of economics - and one that WOW has for reasons peculiar to the Australian supermarket landscape defied for longer than seemed possible - that returns on capital in the order of 20% or more will sooner or later be competed away in the absence of a durable competitive advantage.
WOW has the competitive advantage part of the equation in terms of distribution, logistics and store locations. But it does not have the durable part of the equation, since in the end all it is is a retailer and very few retailers, if any, can forever earn the kinds of returns on capital that WOW has earned to date.
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Down-trend broken yet? Anyone care to provide an updated analysis?
Triathlete
Keep it Simple..!
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Bill M
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From: [url]http://www.theage.com.au/business/retail/woolworths-lowes-weigh-masters-options-as-clock-starts-ticking-20151019-gkdaba.html
[/URL]
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Woolworths, Lowe's weigh Masters options as clock starts ticking
Woolworths is expected to pull the plug on its $2.2 billion foray into the home-improvement market if joint venture partner Lowe's decides to exercise an option to sell its $1.1 billion stake.
Analysts believe Woolworths is unlikely to continue to run the loss-making Masters chain single-handedly if Lowe's exercises its put option and forces Woolworths to buy its 33 per cent stake for more than $800 million.
"If Lowe's wants out Woolies will want out as well," one analyst said.
---
Full Story here:http://www.theage.com.au/business/retail/woolworths-lowes-weigh-masters-options-as-clock-starts-ticking-20151019-gkdaba.html
[/URL]
---
Woolworths, Lowe's weigh Masters options as clock starts ticking
Woolworths is expected to pull the plug on its $2.2 billion foray into the home-improvement market if joint venture partner Lowe's decides to exercise an option to sell its $1.1 billion stake.
Analysts believe Woolworths is unlikely to continue to run the loss-making Masters chain single-handedly if Lowe's exercises its put option and forces Woolworths to buy its 33 per cent stake for more than $800 million.
"If Lowe's wants out Woolies will want out as well," one analyst said.
---
Full Story here:http://www.theage.com.au/business/retail/woolworths-lowes-weigh-masters-options-as-clock-starts-ticking-20151019-gkdaba.html
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I'm not sure what happens in the short term, but WOW margins are still at world record highs for supermarkets.
There would have to be a permanent unique reason for this, otherwise you'd expect them to be challenged, as is happening and mean revert.
There would have to be a permanent unique reason for this, otherwise you'd expect them to be challenged, as is happening and mean revert.
