THE TIPSTER
DESPITE missing out on much of the recent rally in stocks, demand for Smith and Nephew seems to be picking up. Recent research highlights it as a potential takeover target, but aggressive call option buying would indicate the stock could be in for a big move higher. ETX Capital is quoting 568.43p-570.07p.
A month ago the tipster recommended holding William Hill shorts until they hit the 162p level. It did just that on Tuesday. It would be wise now to reverse to a long position at this level. It might also be a good idea to place a trade with Betfair next week when it starts to float since it might create a knock on effect for the other bookmakers. This also applies to Ladbrokes. Spread Co offers a 161.13p –162.37p spread on William Hill and 132.1p–132.8p on Ladbrokes.
The markets liked what they heard from the comprehensive spending review (CSR) and the FTSE made a final surge in recognition before closing yesterday. The positive move higher could encourage the bulls so we could see further gains from the FTSE. Capital Spreads is quoting a price of 5,719.0-5,720.0 for the FTSE 100 index.
The CSR contained few big surprises yesterday, however the pound did not like the bank levy idea very much. Sterling weakened towards the recent range lows against the euro. A break above the £0.8840 recent highs could signal further losses towards £0.8895. CMC Markets offers a spread on at euro-sterling £0.8792-£0.87938.
Gold is nowhere close to its $1,384 high, yet it is still supported by the uptrend. This could offer investors not already long on the yellow metal an opportunity to pick some up. WorldSpreads offers a $1,344.2-$1,344.7 spread on rolling spot gold.
Tuesday’s move by the Chinese to hike interest rates looks like it will have little effect in the longer term. The greenback is showing signs of weakness and the mining sector is working hard to recover its losses. Much like the index as a whole, the UK mining sector price is within striking distance of fresh 2010 highs and is bolstered by recent solid earnings news. There could be more scope on the upside. The current IG Index price on the UK mining sector is 24343-24389.
Following the release of Diageo’s annual report, forecasters have revised up their expectations for the drinks provider. Its stocks gained between 1.0 per cent and 2.5 per cent yesterday as investors preferred defensive stocks. The current IG Index price on Diageo is 1,158.8p-1,161.2p.
Good news keeps coming out for BP stocks at the moment. The moratorium on deepwater drilling has lifted some 7 weeks earlier than expected. The stocks could run all the way up to 543.39p. IG Index is currently offering a spread of 434.96p-435.85p.