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russholmes
20-06-2006, 02:16 PM
Any chartists out there care to comment on teh CBA chart? To my novice eye a close below $42 would break support?

Halebop
20-06-2006, 02:50 PM
I'm not much of a chartist but I think CBA is looking technically weak just now. There were potential support lines at around $43 and $42 and both of these looks to have been ignored. The confirmed Secondary uptrend was also broken at the same time.

The next obvious support line for me is $37. Coincidentally this is also lining up with the 2003 Major (but tentative / unconfirmed) uptrend line...

http://img53.imageshack.us/img53/3606/cbaax17jun04to21jun060ru.png

Phaedrus
20-06-2006, 03:46 PM
I have been monitoring CBA's 2 year uptrend using the 6 indicators plotted below. All 6 have now triggered Sell signals. These Sell signals began on 24/5/06 with most firing on 31/5/06 and the last (the trendline break) on 7/6/06. Prior to this, none of these indicators had triggered any Sell signals over the last 2 years. I am now completely out of CBA.

http://h1.ripway.com/Phaedrus/CBA620001.gif

russholmes
23-06-2006, 08:43 AM
This was my dilema, on one hand, proven steady growth, PE of 13. On the other hand the charts show sell signals..

Have sold out, will be back in at $37 ;)

tricha
23-06-2006, 11:48 AM
Sorry Russholmes, unless there is a major crash, which is remotely possible.

99% chance it will go up and away.

In fact Mr Murray who was CEO of ASB bank in NZ, did such an outstanding job there.
Chances are he will do it with CBA as well,it will be $50 by Christmas.

Halebop
23-06-2006, 12:12 PM
quote:Originally posted by tricha

Sorry Russholmes, unless there is a major crash, which is remotely possible.

99% chance it will go up and away.

In fact Mr Murray who was CEO of ASB bank in NZ, did such an outstanding job there.
Chances are he will do it with CBA as well,it will be $50 by Christmas.


Are you as certain of the share price as you are of the former ASB CEO? (Ralph Norris).

tricha
23-06-2006, 01:07 PM
Halebop - how right u r. thanks for correcting me.

Are you as certain of the share price as you are of the former ASB CEO? (Ralph Norris).

yes, CBA are going up, just like the whole ASX will do, with all these tax cuts coming into force next week, a lot of it will find its way into the share market.

But as everyone knows, nothing in life is for sure, except taxs and death.
While China keeps booming so will OZ.

Halebop
23-06-2006, 02:35 PM
quote:Originally posted by KW

A rising share price means a company is continuing to increase profits. However, this is not likely for the banks, which is why the sector is on the nose, due to:
- interest rates rising means less borrowing, therefore less profits
- all banks are now cutting bank fees, therefore less profits
- RBA is cutting interchange fees, again less profits
- declining use of credit cards (due to RBA regulation) .....
- loan default rates are rising ....
- competition for mortgages in a slow market means lower margins ...
- increasing costs as banks open more branches and add staff to improve service levels ....
- retail super fund management fees being dropped in order to compete with industry funds ...
- no further cost cutting programmes left to do ...
- slowing economies in Australia and NZ, less business investment banking ....
- falling housing market, less home equity borrowing/refinancing ....

I could go on, but on the whole, there isnt much good news in the banking sector at the moment.

Personally I think the econonomy will remain relatively strong thanks to being in a near perfect demographic phase. A recession now would be mild (probably technical rather than "forceful") in comparison to the same in the 70s or 80s. Having said that, some factors are relatively weak on a number of important fronts but particularly housing.

In the context of your comments above holders might want to consider CBAs historical failure to increase market share. If the banking market as a whole is in for a soft'ish patch, CBA seem unlikely to outperform its peers.

bambi
11-07-2006, 08:39 AM
Phaedrus:
Your chart makes a lot of sense and I'd like to get some advice from you.

Based on your chart the entry points look obvious and I guess you bought a position as each indicator was hit. But how did you choose the values for each indicator? eg RVI(45) how did you come up with 45? Do you back test each stock and see what works best? I'm struggling with this at the moment so this would be very useful to know what others do.
Also why did you choose the EMA instead of a SMA?
And lastly how did you set the 7% trailing stop? Is this based on an ATR or a previous support? It doesn't appear to be a previous support level.

I'm really interested in TA and have been reading back through your old posts to try and work out what you have been doing and what works.

Bambi

stevieb
11-07-2006, 06:03 PM
quote:Originally posted by KW

A rising share price means a company is continuing to increase profits. However, this is not likely for the banks, which is why the sector is on the nose, due to:
- interest rates rising means less borrowing, therefore less profits
Actually no, interest rates rising means less NEW borrowing not less total borrowing (= new + EXISTING), in fact higher interest rates usually make it harder to pay off existing debt (exactly your point on loan default rates below - you can't have both sides of the argument) so EXISTING borrowing stays high.

quote:
- competition for mortgages in a slow market means lower margins ...

Have heard this theory before but have also seen some evidence of the opposite, i.e. bank increase their loans rates much more readily on loans than deposit accounts so what they lose on loans they gain on deposits.

quote:
- retail super fund management fees being dropped in order to compete with industry funds ...

Only minimal evidence of this to date though it has been suggested. However against this you need to weigh the massive advantage of super under new super laws. I think fun inflows and growth of funds under management will easily outweigh any loss of revene due to marginal fee cuts.

PS for all those TA people I think you'll find CBA looks a lot better on TA grounds than just 2 weeks ago

stevieb
11-07-2006, 06:05 PM
quote:Originally posted by stevieb


quote:Originally posted by KW

A rising share price means a company is continuing to increase profits. However, this is not likely for the banks, which is why the sector is on the nose, due to:
- interest rates rising means less borrowing, therefore less profits
Actually no, interest rates rising means less NEW borrowing not less total borrowing (= new + EXISTING), in fact higher interest rates usually make it harder to pay off existing debt (exactly your point on loan default rates below - you can't have both sides of the argument) so EXISTING borrowing stays high.

quote:
- competition for mortgages in a slow market means lower margins ...

Have heard this theory before but have also seen some evidence of the opposite, i.e. bank increase their loans rates much more readily on loans than deposit accounts so what they lose on loans they gain on deposits.

quote:
- retail super fund management fees being dropped in order to compete with industry funds ...

Only minimal evidence of this to date though it has been suggested. However against this you need to weigh the massive advantage of super under new super laws. I think fund inflows and growth of funds under management will easily outweigh any loss of revene due to marginal fee cuts.

PS for all those TA people I think you'll find CBA looks a lot better on TA grounds than just 2 weeks ago

Phaedrus
11-07-2006, 08:05 PM
Bambi, I usually step incrementally into and out of trades, buying/selling as each of my chosen indicators are triggered.

My primary preferred trend indicator is a trendline. The idea is to adjust the sensitivity of supplimentary indicators such that they have a level of activity roughly equivalent to that of the trendline. That way, they can be used to confirm (or otherwise) signals derived from the trendline breaks. This is easily done by setting indicator periods such that they are nearly (but not quite) triggered by the lows used to draw the trendline. In this case, I had it all set up by the end of 2004, using the low of 14/12/04. Sometimes these initial settings require a bit of fine tuning as the uptrend progresses, but in this case, later lows nicely confirmed the original settings. Take a look at the low of October 2005 for example. See how it re-confirmed that all these different indicators were accurately tuned to the on-going uptrend. The same approach is used to set Trailing Stop levels. Start off with a fairly loose Trailing Stop and tighten it as the trend progresses. The idea is to end up with a Trailing Stop that just skims under all previous lows. That way you can quickly and easily detect when the uptrend weakens. The 7% Trailing Stop featured here was set using the low of March 2005 and was nicely confirmed by the low of August 2005. Ditto for setting the moving average period. This was initially set to skim under the low of Dec 04 and confirmed when it skimmed under the lows of Aug and Oct 05. The type of moving average used is not critical. Everyone has their own favourites and of course each different type will require a different period. If you are in doubt, use the one that gives the closest fit to the price action.

Just ask again if I haven't explained any of this clearly enough for you to understand.

Lawso
13-07-2006, 11:19 AM
I've owned Westpac for several years and have done well out of them, though they're not so attractive taxwise since they closed off the NZ-based stock. The sh'ouses now take 30% RWT off my dividends :(

Anyway, I'm thinking of buying more WBC, or maybe another Aussie bank, but am surprised at the current weakness in the sector. Yesterday all but NAB were down again quite sharply.

To my simple mind, the banks are a fair barometer of the state of the economy and there's no reason to think Oz won't continue to power ahead. So I'd be interested to get some views on this odd situation. I've read most of the above posts with interest but I can't say it's any clearer to me.

Halebop
13-07-2006, 11:49 AM
quote:Originally posted by Lawso

To my simple mind, the banks are a fair barometer of the state of the economy and there's no reason to think Oz won't continue to power ahead.

They are a barometer of the state of the economy but most particularly they are a litmus of the housing and business sectors.

Housing does not look so strong in NSW, VIC and (dare I suggest) NZ. WA will be dependant upon the commodities sector and as such growth there is viewed as cyclical. QLD has retirement and "sunbelt" demographics on its side and my money would be on relative outperformance there over the next 10+ years.

But QLD doesn't drive the bank lending market to the same degree. True retirees won't be borrowing the same amounts and boomers moving from Sydney to Brisbane are probably trading down to a degree in any case.

This is why banks have been talking up their business lending over the last few months because there isn't so much growth (vs historical) in residential - a lot of expensive churn instead. Business growth prospects look best in the same markets that are currently frothy on the residential property front. Balance sheets of SMEs are historically strong although some of the stuff I've seen shows liquidity is a bit tight in manufactoring and retail amongst others. This plus job and sharemarket data all reads like end of boom cycle stuff to me. The good news here at least is the Boomers are at the sweetest of the sweet spot in terms of earnings, consumption and investment so the end of the boom might merely be a soft or tired patch rather than recession. The wild card for me is still oil. Asia's growth and boomer resilience is a potent combination awaiting some "shock" news.

Lawso
13-07-2006, 12:43 PM
Thanks for your thoughts, Halebop. Good stuff. I guess you wouldn't disagree that the Oz banking sector is a good place to be for a moderately active but essentially long-term investor like dear old me.

Halebop
13-07-2006, 02:11 PM
quote:Originally posted by Lawso

I guess you wouldn't disagree that the Oz banking sector is a good place to be for a moderately active but essentially long-term investor like dear old me.

Banking isn't an especially defensive industry to my mind but when your product is cash you have to do something pretty stupid to run into cash flow problems. I guess this is why bank shares are often attributed as defensive? Just don't forget how close Citicorp and Westpac came to imploding in the early 90s.

I don't have a strong view on the sector although valuation multiples have expanded a lot over the last 15 years. I think they will continue to provide adequate returns but are unlikely to provide the same Low risk / High return / High dividend combo that people have come to expect. They do at least tend to have set and forget qualities if that is a primary goal.

tricha
18-03-2008, 09:33 PM
Banking isn't an especially defensive industry to my mind but when your product is cash you have to do something pretty stupid to run into cash flow problems. I guess this is why bank shares are often attributed as defensive? Just don't forget how close Citicorp and Westpac came to imploding in the early 90s.

I don't have a strong view on the sector although valuation multiples have expanded a lot over the last 15 years. I think they will continue to provide adequate returns but are unlikely to provide the same Low risk / High return / High dividend combo that people have come to expect. They do at least tend to have set and forget qualities if that is a primary goal.

Read last night where ASB had 60% of their loans in the housing sector, hmm.
Hmm I wonder where CBA stands and and 6 monthes a go these deadhead brokers were spouting defensive, as Halebop states, hmm.


http://cb.iguana2.com/stockness/hist2/ASX/CBA/1y/line/30/0/

Jay
10-03-2009, 02:30 PM
Had a call from Equity (whom i don't really deal with now) asking if I still had any CBA shares and if do I should sell - I do (a few) and I am not .

Well they rang home and asked for me and my wife answered, the fact that I was not there did not seem to worry him, he just kept talking, he could have been talking to the maid!
Not very professional!

macduffy
10-03-2009, 03:35 PM
Thanks for that.

I'll tell the maid not to speak to Equity, should they call.

;)

macduffy
10-03-2009, 03:49 PM
Thanks for that.

I'll tell the maid not to speak to Equity, should they call.

;)

But seriously, I think the call may have had something to do with the fact that the CBA has a $10,000 Share Purchase Plan at present. Closes tomorrow but I think the take up price is $26. Current SP allows a nice arbitrage, selling at $28 odd.

;)

macduffy
10-03-2009, 04:55 PM
But seriously, I think the call may have had something to do with the fact that the CBA has a $10,000 Share Purchase Plan at present. Closes tomorrow but I think the take up price is $26. Current SP allows a nice arbitrage, selling at $28 odd.

;)

OK, SP is a little below $28 but there's still a profit there.

I understand that SPP shares can be taken up and paid through E-Pay but I'm not a CBA shareholder.

herbert240
08-06-2018, 02:46 PM
What are the prospects for recovery in the next year or two or is time to cut losses and sell?

peat
08-06-2018, 04:05 PM
If I had to make a call on CBA right now I would say there is a strong chance of a sharp recovery.
But you must do what your circumstances dictate.

herbert240
08-06-2018, 09:02 PM
Thanks Peat