THE TIPSTER
THE German Dax 30 index finally broke out of its six-month trading range, blasting through the previous high of 6,385 and the 6,400 level to a high of 6,439.3. The area between 6,385 and 6,400 should act as support on pullbacks, so look to buy around these levels with a view to taking profits at the 6,600 level. Spread Co offers a spread on the Germany 30 market of 6,438-6,439.
Word of Standard Chartered’s rights issue certainly rocked the banking sector and the speculation seems to be that more will follow the cash call route. Against a backdrop of QE the timing could be worse but just how the market’s appetite for this will stack up remains to be seen. Banking stocks recovered a little from Wednesday’s rocky start but continue to significantly underperform the market. The current IG Index price on the banking sector index is 5,034-5,044.
Oil and gas exploration firm Heritage Oil has had a good run of late, after falling out of favour due to problems over tax issues in Uganda. Heritage has a large oil find in Kurdistan so this stock could well be a play when an Iraqi government is formed. It is certainly one to keep an eye on. Spreadex offers a December price of 351.1p-354.6p.
A reported massive buy order in Aussie dollar-Swissie yesterday afternoon kicked off a chain reaction in a number of crosses, sending dollar-Swissie and euro-Swissie skyward for a change. It also gave a lift to Aussie dollar-US dollar, taking it back to $0.9900, just below the strong resistance at $0.9905. If it fails to break through, we may be looking at a triple top and a pullback to the seven-day moving average at around SFr0.98000, or even the 15-day exponential moving average at $0.9700. Spread Co offers a spread of $0.9890-$0.9892.