daytrades feb 21 pre-market, page-2

Aksier's Weekly Update:

The Scorecard from Friday / The Past Week
Markets
XJO 4936.7 points, -1.7 points, -0.0% / +55.8 points, Up1.1%
DJIA 12,391.25 points, +73.1 points, +0.6% / +118.0 points, Up1.0%
SPX 1,343.0 points, +2.6 Points, Up 0.2% / +13.8 points, Up1.0%
NASDAQ 2,834.0, +2.4 points, Up 0.1% / +24.6 points, Up 0.9%
FTSE 6,083.0 points, +4.4 points, Up 0.1% / +20.1 points, Up 0.3%
DAX 7,426.8 points, +21.3 points, Up 0.3% / +55.6 points, Up 0.8%
Hangseng HSI 23,595.2 points +293.4 points, Up 1.2% / +766.3 points, Up 3.4%
Nikkei 10,842.8 points +6.2 points, Up 0.2% / +237.1 points, Up 2.2%
Shanghai 2,900 points -27.0 points, Down 0.9% / +72.7 points, Up 2.6%

Key Commodities
Gold +$4.50 to $1,389.70, Up 0.3% / +$32.40, Up 2.4%
Silver +$0.88 to $32.67, Up 2.8% / +$2.75, Up 9.2%
Oil USD -$0.16 to $86.20, Down 0.2% / +$0.92 , Up 1.0%
Copper USD +$0.001/lb to $4.4751/lb, Up 0.4% / -$0.0592, Down 1.3%


Market Direction XJO: The XJO rose 55.8 points or 1.1% for the week and continues to be right up against resistance. Despite Friday night's positive lead from the US, our futures are pointing to a small 5 point drop on the open on Monday. Looking at the chart this week I continue to see warning signs of an impending fall in our market. Firstly, the market continues to be overbought on the indicators. Secondly I see a declining trend in volume during the rise which began in May last year when we saw a double bottom. Finally the MACD histogram has been making lower highs since the middle of June last year. It would not surprise me if we are at or very near the highs for this cycle before the markets turn down for some time (within weeks in my opinion). That doesn't mean that there wont be some sectors that perform well during this period. As an example, I expect the US dollar to plummet soon (see USD Index chart below) and this will push up the value of gold and silver to new highs. Therefore I expect the precious metal stocks to weather any storm much better than other areas. I will be reducing my holdings this week and increasing my hedging to protect some of the value in my core and strategic holdings.

The Bloomberg chart of the USD index below suggests that there is about to be further downward pressure on the greenback. Looking at their estimates we could see a swift 5% devaluation of the US dollar which would be good news for precious metal prices. As for base metal prices I am not so bullish because I believe the economic data has been much more sublime than the stock markets performance and therefore the underlying demand may be weakening. This conclusion was supported by the rising stockpiles of Copper during the past week.


Market Direction DJIA: The US market continued to move higher last week making it the third week of advances in a row. Eleven of the past twelve weeks have been positive; that is quite a run. All of the indicators are showing that the US market is overbought so the risk to the downside remains. I have revised my target based on a measured move from the low in December and this gives a target of 12,600 so there could be a couple of hundred more points left to rise.



Economic Data:
Early in the week the focus will be on the feedback coming out of the G20 meetings in Paris. Not a lot is expected other than some discussions around how emerging markets will handle the threat of inflation and the imbalances on the flows of money between nations. The most important economic data out this week is going to be the preliminary GDP numbers for the December quarter coming out of the US on Saturday morning..

ALL Fallout from the G20 meeting held in Paris - 18th & 19th of February
USD Holiday Monday
EUR German ifo Business Climate - Monday 8:00pm
GBP Public Sector Net Borrowing - Tuesday 8:30pm
USD CB Consumer Confidence - Wednesday 2:00am
USD Core Retail Sales m/m - Wednesday 12:30am
AUD Reserve Bank Gov Stevens Speaks - "Australia and the Resources Boom" - Wednesday 9:00am
GBP MPC Meeting Minutes - Wednesday 8:30pm
USD Existing Home Sales - Thursday 2:00am
AUD Private Capital Expenditure q/q - Thursday 11:30am
GBP Nationwide HPI m/m - 24th to 28th February
USD Core Durable Goods Orders - Friday 12:30am
USD Unemployment Claims - Friday 12:30am
USD New Home Sales - Friday 2:00am
GBP Revised GDP q/q - Friday 8:30pm
USD Preliminary GDP q/q - Saturday 12:30am


Company Reporting Season:

There are some big names in the US reporting this week including Dow components Hewlett Packard and Home Depot and the biggest retailer Wal Mart Stores Inc. There are also some other large retailers reporting including Macy's, JCPenny and Safeway Inc.

Monday: Onesteel Ltd, Oil Search, Seek Ltd, Sonic Healthcare Ltd, Southern Cross Media Group
Tuesday: AGL Energy, Asciano Group, Boart Longyear Ltd, Carsales.com.au, Coca-Cola Amatil Ltd, Hertx Global Holdings Ltd, Hewlett Packard Ltd, Home Depot Inc, Macarthur Coal Ltd, Macy's Inc., Suncorp Metway Ltd, Virgin Blue Holdings Ltd, Wal Mart Stores Inc.,
Wednesday: DIRECTV, Fairfax Media Ltd, Goodman Group, Insurance Australia Group Ltd, IOOF Holdings Ltd, Macquarie Airports, Pacific Brands Ltd, Ramsay Health Care Ltd, Saks Incorporated, Tatts Group Limited, Toll Holdings Ltd,
Thursday:Gap Inc., Harvey Norman Holdings Ltd, Newmont Mining Corporation, Safeway Inc., Woolworths Ltd,
Friday: JCPenny, Lioyds Banking Group PLC,


Stocks To Watch



Gulf Industrials Limited: GLF/GLFOB The quality of this company and its backers seems to be finally resonating with the market. As previously mentioned GLF has some significant backers behind it including African Lion and Jonah Capital. 2011 promises to be a watershed year for the company as it increases the production of Vermiculite, initially to 30K tonnes per annum (worth about $10m at current prices), and also moves other projects towards production, including the limestone project in Madagascar. News Due: Further details of plans to increase production of Vermiculite to 30Ktpa. Development plans for the Limestone Project in Madagascar including feasibility study, which is due to be conducted in the first quarter. Price Target: The stock is likely to break through the top of the rising wedge this morning which will provide a target of 10 cents. This is only a minor level of resistance with the next level being 20 cents. The potential upside here in coming months is around 300%. Disclosure: Holding GLFOB


The weekly shows the real potential of GLF. Friday's breakout was very significant. If you look at the resistance levels on the chart below there is only minor resistance at 10 cents. The next level after that is 20 cents. Given the potential developments occurring at GLF I expect this to be a star performer in the next few months.



Hawkley Oil and Gas Limited: HOG HOG announced last Thursday that the Sorochynska Well 201 has commenced production with Hawkley being added to the list of producers in time for the 5th of February deadline. The results from flow testing through a 9mm choke were encouraging with a BOE of 2,500 barrels per day. The well is expected to produce for 8-9 years before any significant decline in production rates. NOPAT rates of 38-45% are the norm in Ukraine. Given the high flow rates the company is also likely to report a revised upgrade to the reserves at the field, which, if significant could justify further production wells. There is still a possibility that a small capital raising might occur however I don't expect a substantial discount to the current price. Provided actual production figures are in line with the flow test results then the company should start to attract the interest of institutions because the income from this one well is likely to justify a price in the 60-70 cent range. News Due: Initial proouction figures from the Sorochynske well. Updated reserve statement for the Sorochynska license area. Outline of plans to drill another well to increase production. Price Target: HOG appears to be breaking out of a flag pattern and based on a measured move the target is 79.5 cents so if the breakout is confirmed early this week there is plenty of upside left. Disclosure: Holding HOG



Muting Gold Limited: MYG/MYGO/MYGOA Although MYG didn't perform last week I expect better days lie ahead. Drilling at the company's Deflector Deposit, which has now been underway for 3 weeks and I expect at some point soon the level of interest will pick up so watch for a rise in price plus significant volume as a sign. The poor performance of late is probably related to the fact that the company raised a $4.5m in fresh capital at 8.0 cents late last year (56.3m shares). Many would be tempted to take a 60% profit in such a short time period so I believe that is where much of the current stock is coming into the market. Don't forget that NY firm RB Milestone is now covering MYG, so any positive results may result in an updated release about MYG being released. The target for Deflector is 1.65-2.50m oz of gold and 40-80K tonnes of copper, which is a sizeable resource. News Due: Drilling results from the extension drilling program at the Gullewa Project which contains the Deflector Deposit. Price Target: The chart still shows the pennant is in play and if the breakout is to the upside then the target is 26.5 cents, however there might be some resistance at the recent high of 20 cents. Disclosure: No Stock Held



Peak Resources: PEK Peak Resources is back in the list of stocks this week as we await results from a further 8 holes from the Ngualla project. Several wees ago the company announced outstanding results including 64m @ 5.48% REO from surface and 34m @ 7.30% REO from surface. All 13 holes reported intersected more than 1% REO. The next round of drilling will have the goal of progressing to a JORC resource as rapidly as possible. News Due: Results from a further 5 RC and 3 diamond holes are due from drilling at the company's Ngualla Rare Earths Project are due some time in the next 1-3 weeks. Outline of further drilling plans at Ngualla which is scheduled to commence after the wet season ends in late April. Price Target: Although the indicators are approaching overbought levels there still is room to move ihigher in the coming week provided results are good. Based on a measured move shown on the chart below the target price for the current move is $1.05 Disclosure: No Stock Held



Resonance Health Limited: RHT Reasonance Health Ltd is an emerging healthcare company which performs scans for liver iron levels using their MRI technology and combined analysis (called FerriScan). This removes the need for invasive liver biopsies which has up until now been the method used to measure this. FerriScan has several advantages including a reduced risk of infection and elimination of pain which is a real risk with biopsies. The technology is well accepted and is being adopted around the globe. FerriScan is currently available in 24 countries. In the US it is available in 28 hospitals, with the distribution network growing rapidly. The turning point for the company was the decision in 2009 to start employing direct marketing resources in countries commencing with the UK. This resulted in exceptional growth rates and was soon replicated into other markets. RHT is already close to break even on revenues of approximately $2.0m per annum. Any further growth will see the company move into profitability. Longer term the real potential lies in the development of multiple streams of income through the development of new tests. The recent announcement of an agreement with Pfizer to evaluate the company's MRI technology to test for liver fibrosis is a sign of the strength and potential of RHT's technology. If this test is successfully developed then it has the potential to be the next big earner for the company. There are other tests also being worked on also with global powerhouse pharmaceutical companies such as the test for diffuse fibrosis which will be evaluated in conjunction with Glaxo Smith Kline (GSK). So we have a company which is already close to break even, working on developing new streams of income with global powerhouses such as Pfizer, Novartis and GSK that has a market capitalization of approximately A$11m. I don't think this will be the case for much longer! News Due: News of further expansion of the distribution network for the company's Ferriscan liver iron MRI test. Feedback from the FDA on the two additional tests for liver fat and cardiac iron currently awaiting approval. Price Target: A breakout from the current flag formation to the upside provides a target of 5.3 cents. Disclosure: Holding RHT



Silver Mines Limited: SVL/SVLO Silver Mines Limited took the market by surprise last week with a stunning announcement which disclosed a conceptual target of 26-57m ounces of contained silver plus copper, lead and zinc credits. The stock broke out of a four month consolidation phase and quickly went to new all time highs following the release of the announcement. I expect new all time highs to again be achieved this week. With silver up 2.8% on Friday night the level of interest in the sector is likely to intensify. The Diamond drilling program at the Webbs Silver Project which began late last year, the results of which are yet to be reported, are due at any time. All holes to date have intersected visible mineralisation so I would expect some good results due from these holes will maintain the current upward momentum of SVL's share price. Further interest will come as the company commences a 12,000m RC drilling program in late March. Once the program is underway a continuous stream of results should come from the company. News Due: Results from diamond drilling at the Webb's Silver Project, most of which are scissor holes which will primarily be used to confirm existing mineralization thereby increasing the confidence in the existing resource and to provide samples for metallurgical test work. The commencement of the 2011 drilling program, which will involve 12,000m in RC holes, 8,000m of which will be centred on the Webb's project. Results from the scoping study into the development of a mine at the Webbs Silver Project. Price Target: The share price has now broken from a four month consolidation phase. Volume spiked during the past week after release of the conceptual targets for the Webbs Silver Project. Whilst the slow stochastic has crossed down the MACD is still rising. There has been positive divergence signal being given by the MACD histogram proved to be a good omen of a forthcoming breakout which occurred last week. The breakout level which was a close above 25 cents occurred and the new target based on a measured move is around 45 cents. Disclosure: Holding SVL/SVLO



Good Luck this week.