THE TIPSTER
MINING stocks have had a good run recently. With some important economic data due this week in the form of the UK’s GDP and US consumer confidence figures today, some good numbers could push the miners higher. Capital CFDs offers a price of 3,699.1p-3,703.9p for Rio Tinto.
Gold’s key resistance level of $1,300 per ounce has fallen and major producer, Barrick, is tipping $1,500 an ounce as being entirely within reach. Concern over global economies is certainly adding credibility to this idea and the prices of precious metals still have the potential to continue appreciating even into these uncharted territories. Current IG Markets price on Gold is $1,298.60-$1,299.10.
Acquisitions are frequently seen as overpriced ventures but Unilever’s purchase of Alberto Culver is cheering buyers and showing that M&A activity is very much alive and well. With the news coming at the same time as word of United Biscuits’ possible sale to Bright Food, further consolidation in the consumer sector may well follow. Current IG Markets price on Unilever is £18.38-£18.39.
One popular pairs trade that looks attractive is British American Tobacco (BAT) and Imperial Tobacco. The spread, which has traded around £1.12 for most of the year, and as low as £1.01 in January, has popped out to £1.24 over the last few months. This would normally be a signal to sell BAT and buy Imperial, looking for the spread to contract. But fundamentals show that Imperial is not performing as well as its peer and BAT is more in favour, offering better opportunities for growth. It also pays a higher dividend. Spread Co offer BAT at 2397.7p – 2402.3p and Imperial Tobacco 1928.6p – 1933.4p.
After a well-defended $1.35 barrier option was finally taken out on Monday morning in euro-dollar, the pair did not accelerate higher but instead saw more selling. The pair only reached a high of $1.3505 before falling away to $1.3450. $1.3515 looks like it’s going to be a major point of resistance since it marks the 50 per cent retracement of the big $1.5145-$1.1875 move. The word was that hedge funds were sellers as soon as the pair came near this level yesterday morning. Look to sell euro-dollar around the $1.3510 level but keep stops relatively tight. Spread Co offer a spread on euro-dollar of $1.3476–$1.3478.