Well without the lead from the US overnight I would expect like everyone else to see our markets fairly flat across the board.
One thing that I believe needs to be taken note of today is what grandcaruso mentioned regarding the reporting by MGR, DXS and CFX.
These results will have a significant impact on the property sector, and if they turn out to be ok, then expect a solid bounce across the board. More importantly, we need to look out their expected outlooks for the next FY.
Once again, I feel that the iron ore sector remains strong, with continued news flowing out of China suggesting that they have seen the bottom and their economy continues to flow. On the other hand Japan's poor GDP result released yesterday sent shockwaves through the market, though I expect the next quarters results will show signs of a recovery.
Stocks I will be watching today include FMS, FMG, MAE,GPT, UGL, BXB, TPI, TSE and EHL.
Emeco Holdings (EHL) is a stock I have taken a punt on towards close yesterday @ 23.5c. The chart is showing a 3 day seller pattern which usually confirms day traders exiting after a recent run.
Emeco expects to report a record interim net profit after tax of $39.1 million for the six months ended 31 December 2008 representing a 27.9% increase on the prior corresponding period. Operating free cashflow (including net maintenance capex) is expected to be $51.4 million for the period. The results remain subject to final audit review. The interim result, on an annualized basis, is in line with Emeco’s previous earnings guidance of $75 - $81 million and reflects a strong operational contribution from Emeco’s businesses in Australia, Canada, Indonesia and the US.
Outlook
Emeco believes downside risks to the previous FY2009 earnings guidance have now emerged and the Company now anticipates net profit after tax for the full year to be in the range of $65 - $72 million, broadly in line with average consensus estimates of approximately $70 million and FY2008 earnings of $67.5 million. Furthermore, the present market volatility and the uncertain global outlook for Emeco’s customer base have significantly increased the uncertainty of any forecasts made in the current environment.
These results IMHO are very positive and the market reflected that over the past few days rising from 21c on the 10th Feb to 32.5c on the 12th Feb. Since then it has retraced from its highs back to a close of 23c yesterday.
There is a gap in the chart which on many occasions gets filled, though there are cases where it doesnt. Looking at the buy stacks I dont think the gap will get filled on this occasion, in addition on the back of a solid announcement before the rise.
Here is the chart showing the 3 day sell down as traders exit. IAP 23.5c this morning, if you willing to take a punt that the gap doesnt get filled, you might be nicely rewarded.
