XAO Technical Analysis

kengaikl · 1 February 2008

Re: XAO Analysis

MR. said:
Sorry I must be misundertanding this post Kengaikl.
Are you attempting to have ago at some of us?

I also have a vision of a child with his hands over his ears and a mouth that doesn't know when to shut up!

Hay Mr i reckon BHP will punch the bears in the face again on monday. Its up around 8% in london rio's up 10%. These 2 stocks would probably push the index up 100 points on monday. Im only having ago at the at you because you dont look at the fundamental strengths of companies like RIO and BHP.

Nyden · 1 February 2008

Re: XAO Analysis

kengaikl said:
Hay Mr i reckon BHP will punch the bears in the face again on monday. Its up around 8% in london rio's up 10%. These 2 stocks would probably push the index up 100 points on monday. Im only having ago at the at you because you dont look at the fundamental strengths of companies like RIO and BHP.

Hello Kengaikl,

I think the issue is - many are looking at the fundamentals, or rather; re-evaluating them.

That's the very problem right now; these 'solid' fundamentals are currently in question. The growth of commodity prices is in danger at the moment, if China slows down, if the US hits a recession; with growing costs for these companies ... can they maintain these prices if commodity prices do not grow / decrease in the coming months / years?

The commodity sector has run very hot in the last few years; perhaps many companies currently have prices that reflect the hopes / gamble that this run is going to continue, which it may / may not.

Can you imagine though, if things do deteriorate here badly though? Imagine every single average joe moving his /her super fund out of stocks, & into cash ... a mass of sellers, with very few buyers.

mayk · 1 February 2008

Re: XAO Analysis

Why are we discussing RIO/BHP in index?? Ahh is it because it accounts for 20% of XAO index. If that is the case then I will shut up

All depends on the USofA tonight regarding monday. Strong metal prices will see BHP in green, but again , after two-three days of consecutive rise some red days are also present.

Eitherway I sold out of bhp today with a small profit. Small brokeage fees makes you do that. .

On topic of XAO, I guess general sentiment is bullish again and the prime reason I suspect, is the Feb dividend and reporting season, which might be really good.

The only worrying aspect, apart from US, is the local interest rate rise in coming days.

wayneL · 1 February 2008

Re: XAO Analysis

kengaikl said:
Long run the bulls always win.

Another one of those useless platitudes, a cliche'.

Of course with qualifications, it's dead right and has mathematical underpinnings, but the qualifications are as important as petrol to a Porche.

For instance, I will guarantee you that each one of the the intelligent bears on this site is in reality a bull in the long run. In fact most bears are only bears so they can subsequently be bulls.

This is not a team sport and bears don't wear jumpers with numbers on them; it's a discussion board, so rational discussion will get you much further.

If you like BHP, fine, tell us all the reasons why it won't be affected by the approaching problems in the world economy.

Uncle Festivus · 1 February 2008

Re: XAO Analysis

How is BHP & RIO relevant to a thread on the XAO? My futures data is now up from the close today some 150 pts, possibly due to the fireworks about to happen Monday with the BHP attempted t/o of RIO, & the blocking stake by Chinalco and partner Alcoa.
If rationalisation in industries and companies paying absurd/irratioanal premiums to own other companies is a sign of a market top then this is it!

Aluminium giant Alcoa has joined forces with China's state-owned Chinalco to take a £7bn, 12pc stake in Rio Tinto, throwing BHP Billiton's takeover plans for Rio into chaos.

kengaikl · 1 February 2008

Re: XAO Analysis

wayneL said:
Another one of those useless platitudes, a cliche'.

Of course with qualifications, it's dead right and has mathematical underpinnings, but the qualifications are as important as petrol to a Porche.

For instance, I will guarantee you that each one of the the intelligent bears on this site is in reality a bull in the long run. In fact most bears are only bears so they can subsequently be bulls.

This is not a team sport and bears don't wear jumpers with numbers on them; it's a discussion board, so rational discussion will get you much further.

If you like BHP, fine, tell us all the reasons why it won't be affected by the approaching problems in the world economy.

At current long term contract prices BHP is supplying iron ore to China at around $60. Spot price for iron ore is atleast 3 times the long term contract prices. So if BHP gets its way of increasing Iron ore prices by even 25-30% its earnings will definately be affected. If BHP's takeover of RIO is sucessful it will control around 40% of the worlds iron ore. By then it will have as much bargaining power as the middle east has over oil. Therefore in the long run i believe BHP will have the power to actually control prices of commodities. Which means a small slow down in the US if there is will have little or on impact of its earnings.

sorry i know this forum is only for discussing the XAO but 'cos it makes up nearly 10% of the index i feel it's justified.

Uncle Festivus · 1 February 2008

Re: XAO Analysis

kengaikl said:
Chinese GPD figures out yesterday show that the slow down in the US has yet to effect their economies and as long as they continue to grow is hard to see that the demand for our resources to drop.

"as long as they continue to grow"....yes, that's the problem now?...... 1 month doesn't make a trend but......

Feb. 1 (Bloomberg) -- Manufacturing in China, the world's fastest-growing major economy, cooled in January as growth in shipments overseas slowed.
The Purchasing Managers' Index fell to 53 from 55.3 in December, the China Federation of Logistics and Purchasing and the National Bureau of Statistics said today in an e-mailed statement. A CLSA Asia-Pacific Markets PMI index slipped to 53.2 from 53.3.
Exports grew at the slowest pace since 2002 in the fourth quarter, indicating that recent yuan gains, the cooling global expansion and cuts to some export-tax incentives are biting.

Uncle Festivus · 1 February 2008

Re: XAO Analysis

kengaikl said:
If BHP's takeover of RIO is sucessful it will control around 40% of the worlds iron ore.

I can hear Homer Simpson now.....Doh!!!!!!
Or Colonel Klink.......Chinalco!!!!!

Real1ty · 1 February 2008

Re: XAO Analysis

kengaikl said:
BHP really punched the bears right in the face today. Thats what you get for shorting fundamentally sound stocks.

Long run the bulls always win.

Does this also apply to Japanese bulls....

Nyden · 1 February 2008

Re: XAO Analysis

Speaking of BHP/Rio, I don't understand as to why both are going up so high?

Isn't the fact that a stake has been taken up in Rio, make it more likely BHP will fail on the bid, or end up overpaying?

It is just me, or is our entire market just one big speculation at the moment? Too many questions, too few answers. & Unfortunately for us cash holders, this time doesn't seem to be much different... sigh, stellar recovery here we come :

Kauri · 1 February 2008

Re: XAO Analysis

Aluminium giant Alcoa has joined forces with China's state-owned Chinalco to take a £7bn, 12pc stake in Rio Tinto, throwing BHP Billiton's takeover plans for Rio into chaos.

Just an idle thought... a bit of leverage to pry out the ali assets that would be in BHP's stable if/when the T/O materialises???
Cheers
..........Kauri

Kauri · 1 February 2008

Re: XAO Analysis

A Nice peice of news to trade... if you had it at hand and if you go in for that sort of thing of course..

Lindsay Tanner"s announcement that Australia will halve the tax on foreign investments in locally managed funds from July 1 ...The tax change may attract as much as A$13bn a year...

Cheers
..........Kauri

cordelia · 1 February 2008

Re: XAO Analysis

wayneL said:
Another one of those useless platitudes, a cliche'.

For instance, I will guarantee you that each one of the the intelligent bears on this site is in reality a bull in the long run. In fact most bears are only bears so they can subsequently be bulls.

This is not a team sport and bears don't wear jumpers with numbers on them; it's a discussion board, so rational discussion will get you much further.

If you like BHP, fine, tell us all the reasons why it won't be affected by the approaching problems in the world economy.

You make a good point...

sometimes I am a bear in the morning and a bull in the afternoon and vice versa.
I run with the hares and hunt with the hounds whichever suits me....

you can't be one thing all the time.....you need to be flexible imo

back on topic:.....I think that BHP has come up in this thread because it seems to be aligned to the xao. I am cautious about getting back into market for longer thn a day because it is too volatile and I don't have the nerves or know how to deal with it. I think the time to get back into the market was last week and I am sure those who did have done some profit taking...Volume didn't look too great today.

mayk · 1 February 2008

Re: XAO Analysis

Nyden said:
Speaking of BHP/Rio, I don't understand as to why both are going up so high?

A couple of speculations:

1: Maybe it is wish full thinking that bhp will walk away or will not sweeten up its bid for rio.
2: Someone is playing up with BHP shares, so that it is around $40 mark, just for merger ?
3: People are trying to use inverse logic they are equating 1 RIO =3.5 BHP, in the hope that it will materalize. So, as RIO goes up so does BHP.
4: People just like BHP so much and are head over heels in love with it.

In fact BHP was punished quite severely during the correction 'mini-crash' and it is just returning to its upward trend.

On a side note: Isn't it, a sign of a bull market, when companies are trying to buy each other etc? Seems to be the case in BHP/RIO and MSFT/YHOO case. So this might put another tick for those who are in the badwagon of bull market.

vishalt · 1 February 2008

Re: XAO Analysis

Monday is going to be absolute fire. 4%+ and that's just conservative imo.

The price the British listed BHP is at, our BHP should be at around $44 to match.

I love it how everything happens in these markets at once, like all in the one week:

1) Vale in talks with Xstrata
2) Alcoa + China snap up Rio Tinto
3) Microsoft for Yahoo
4) Credit Agricole "exploring" SocGen

bvbfan · 2 February 2008

Re: XAO Analysis

BHP 11%
RIO 3%

banks
CBA 6%
NAB 5%
WBC 4%

add in the other banks and the resource companies won't be able to hold the ASX200 up without the banks also rallying.

While I like resources, banks/financials are in trouble I feel.

Random Walk · 2 February 2008

Re: XAO Analysis

Nyden said:
Speaking of BHP/Rio, I don't understand as to why both are going up so high?

Isn't the fact that a stake has been taken up in Rio, make it more likely BHP will fail on the bid, or end up overpaying?

Exactly! If the bid is more likely to fail, BHP’s share price might rise given that the share price of the bidder seems to fall in most takeover bids. (Similar to the share price action for another example close to our hearts; ZFX’s takeover bid for Allegiance.)

How much of the rally we're seeing is due to BHP/RIO? If their share prices fall back on their large gains (e.g. maybe b/c BHP announces a higher bid), will the fall on the XAO spook investors and create panic selling?

wavepicker · 2 February 2008

Re: XAO Analysis

Seems to me there is a good chance of clear run till mid March.

Cycle point low (red 5) was confirmed witht he higher low on Thurday. The next rotation, which will be a cycle point high (red 6) is not due till mid March which tells me we might have an upward bias till aproximately mid March.

This means we should get 3 smaller cycle points highs in a row (blue 9,11,13)
which in EW is 5 waves (3 highs in a row) to complete red cycle point 6. So i am looking for these 3 blue cycle highs in a row between now and mid march to complete assuming what I am saying is actually valid.

All numbers are points in TIME, they do not represent price levels, take no notice were they have been placed relative the y axis scale

Cheers

MR. · 2 February 2008

Re: XAO Analysis

kengaikl said:
Hay Mr i reckon BHP will punch the bears in the face again on monday. Its up around 8% in london rio's up 10%. These 2 stocks would probably push the index up 100 points on monday. Im only having ago at the at you because you dont look at the fundamental strengths of companies like RIO and BHP.

I must be feeling mighty punch drunk now, and this is going to keep the XAO from turning?.... What are we talking about here.... I don't care if it went up or down on one or two days!!! good volume of responces though!

Well I don't look at charts if thats what you are referring! Put it this way, when Company Directors send me charts I run to the hills and that has put the final nails in two iron ore coffins for me.... I am MR. Fundamental.

As for your RIO and BHP both great companies (nearly bought both recently)and perhaps still with great prospects. What I think you have missed here is at what price? I think you are a year too late! What you are quoting is yesterday's hyp.

So back to the topic. XAO. A group of people are by far smarter than just one. (meaning me) This is why I am here. I question myself all the time! And I question to myself, others postings to try and see their angle if any. There are far smarter people here than me. There is nothing really left for me here at the moment. As I said day trading (or weekly) is not something I want to get further into. I think there's enough already doing this.

My Analysis: The XAO is finally turning with the rest of the world.
Good Luck....

Nyden · 2 February 2008

Re: XAO Analysis

Is anyone holding any shorts? Going to be a painful day on Monday for shorties.

Can it be 'healthy' to be recovering this fast? It seems way too erratic, at this rate; we'll be at 7000 in a month or 2

When you look at past crashes, (this was obviously a mini crash, but still) it takes months / years to recover back to the highs.

I myself am even feeling the greed / desire to 'panic buy' as to not miss the mass of gains that may be coming, but where are we headed? How can a zig-zag be healthy? :

If we can drop hard on something solid, how can we rise on nothing but sentiment? Surely the problems haven't just up & vanished ... Is this a market based on nothing but hot air?

Perhaps this is what is to become the norm of crashes, what with almost every Australian having online access ... fast selling, fast buying. I'm sure the % of internet users has vastly increased since even just our more recent crash, could this be a factor? And if that's the case, gone are the days of buy/hold/never sell ... nothing will ever be valued on fundamentals as everything becomes 'hot', markets will just be a big ol' casino!

XAO Technical Analysis

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