Technicals | Jan 21 2016
19/1:
DailyTrend: Down
Weekly Trend: Down
Monthly Trend: Down
Support levels: $69.49 / $62.70 / $59.68
Resistance levels: $86.72
Technical Discussion
Macquarie Group is a leading provider of banking, financial, advisory, investment and funds management services. It operates as a non-operating holding company (NOHC). The company’s products and services include asset and wealth management which is engaged in the distribution and manufacture of funds management products. In June 2014 Charter Hall Group announced that Macquarie was no longer the substantial holder of the Company. For the year ending the 31st of March 2015 interest income increased 9% to A$5.01B. Net interest income after loan loss provision increased 13% to A$1.73B. Net income applicable to shareholders increased 28% to A$1.5B. Broker / Analyst consensus is currently “Buy”. The dividend is presently 4.6%.
Reasons to remain bullish longer term (downside expected short term):
→ The recent acquisition of an aircraft leasing portfolio is positive for future earnings.
→ The trading range has been penetrated.
→ FY 15 guidance has been revised higher.
→ Almost 30.0% growth in advisory revenues is anticipated in the first half.
→ Capital market trends are improving and figures suggests MQG is set for its strongest half in three years.
→ Recent results were robust helped by favorable conditions in energy markets.
→ The pay-out ratio over the past five years has been at or above guidance.
The patterns were looking good for MQG during our last review with the ideal situation being to see a continuation down toward the lows made in August of last year. Those lower levels haven’t quite been tagged though we are now within a whisker of doing just that. The perfect scenario regarding the patterns is to see a regular flat correction which would be a bullish proposition should it prove to be the correction of choice. Macquarie has been a stellar performer off the 2011 lows where price was sitting at a lowly $19.60 which just emphasises the potency of the prior uptrend. It also puts the recent sideways meander into perspective which in essence is being viewed as a bullish proposition. First of all though we need to see slightly lower levels tagged before our wanted leg higher kicks into gear. Looking at the weekly chart (not shown) shows that price could theoretically head down to the 1.618 projection of wave-A sitting at $59.68 and still be in a position to rally hard although a decline to those levels isn’t our highest expectation at this juncture. However, it is a level to keep a close eye on if the current broader market weakness continues. Analysts continue to like this company with some of the details stated above. Let’s also not forget the dividend yield which is edging toward the 5% region which investors will no doubt be watching closely.
Trading Strategy
If you like the look of the company fundamentally then a buying opportunity could be close by. A rotation down toward the lows of wave-A over the next few days needs to be followed by immediate strength to lock in the aforementioned regular flat pattern. A push straight down through the lows of wave-A means a little more time is going to be required as price will then likely head down toward the 1.618% projection just beneath $60.00. This would also result in price heading back into the zone of support. Again, this will be viewed as a potential buying opportunity following signs of demand.
Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).
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