daytrades sep 27 pre-market, page-2

Stocks To Watch

Market Direction: Favourable trading conditions at the speculative end of the market continued last week however overall market as determined by the XJO was down by 37 points or 0.8% for the five days. If weakness continues this week the MACD looks set to cross down. The slow stochastic and RSI are both falling. If prices head to the bottom of the current trading channel then the XJO will test 4,400 point. Given Friday's lead from Wall St where the Dow was up by 197 points this week should start strongly here in Australia so if the market does strengthen again an attempt to break out from the trading channel to the upside is also possible.



Friday night saw a strong trading session on Wall St with the dow up nearly 2% or 200 points. The major driver behind the gains was an increase in the durable goods orders of 2.0% for the month of August. For the week the Dow gained 252 points or 2.4%. The indicators show there is room for further gains next week. With little in the way of economic data scheduled to be released I expect the DJIA to test the top of the current trading channel shown on the chart below which is at 11,000 points.



A relatively quiet week coming up on the economic front with the major data being the release of the manufacturing indices from several countries. A close eye will be kept on the Consumer Confidence figures due out in the US on Wednesday at 12:00am the trend of which provides a barometer for the future direction of retail spending.

GBP Current Account - Tuesday 6:30pm
USD CB Consumer Confidence - Wednesday 12:00am
JPY Tankan Manufacturing Index - Wednesday 9:50am
AUD Building Approvals - Thursday 11:30am
GBP Nationwide HPI m/m - Thursday 4:00pm
USD Unemployment Claims � Thursday 10:30pm
CNY Manufacturing PMI - Friday 11:00am
GBP Manufacturing PMI - Friday 6:30pm
USD ISI Manufacturing PMI - Friday 10:30pm


AVB/AVBOB: The rich copper grades announced in last weeks drilling results generated a huge amount of interest in the stock with turnover reaching a staggering 1.25 billion [that is billion] shares for the week. That is amazing considering that there are a total of 512m ordinary shares on issue in the market. Anyway the results were outstanding and nobody can argue with that. Results from a further 20 holes are due to be received shortly. They include holes 83 to 91 which are lines 30-40 metres on either side of the line where they hit 9m @ 50.49% Cu. On the lines on both side of the two lines where holes 83-91 have been drilled, there were high grade intercepts of 4m @ 21.53% Cu to the Northwest and 6m @ 21.02% Cu to the Southeast (These two holes are circled in orange on the map below). Based on these actual results and the spacing between the lines I would be very surprised if there aren't some extremely good assays in the two lines where holes 83-91 have been drilled since they are sandwiched in between lines where substantial assays have been returned. The strike area of the copper rich zone appears to be at least 140m in length and approximately 30 metres in width as shown on the map below. Hopefully that will grow in size. News Due: Assay results from holes 83-102 from the company's Rio Verde copper project in Brazil. Price Target: The stock initially needs to retest the high of 8.2 reached last week. Beyond that there appears to be blue sky ahead provided the drilling results are positive. Disclosure: Holding AVBOB





CEO: The stock made a sudden move in the last half hour of trading on Friday with a purchase of 2m shares. A new MD with extensive experience in the coal industry has recently been appointed and the company has announced that it is in negotiations to potentially acquire coal assets in Mongolia. The level of interest built during last week and I expect this trend to continue this week. News Due: News on potential acquisition of coal assets in Mongolia. Price Target: The stock broke out in the last half hour on Friday as the smart money entered. The target for this move is about 2.1 cents. Disclosure: Holding CEOO



MBA: Two weeks ago the company announced a placement of 10m shares at 3 cents to raise $300K whilst the shares were trading at 2.1 cents. This represented a 43% premium to the last sale price. It also agreed to a secured loan facility for a further $1m from the same party. This takes care of funding issues for the company in the near term. The company has been operating in a tough environment and only made $80K on $12.1m dollars in revenue last year. The MD has committed to stay with the company to implement a 3 year strategic plan which should see the company generating profits in the future. The potential of this company is hard to value however the private British company MIG, which owns 4th Screen Advertising has a turnover of about $100m GBP and is profitable indicating the potential of MBA in future years. According to the MD Australia is about 18 months behind Europe in terms of the development of the mobile advertising business. I expect the JV with 4th Screen Advertising to be announced this week. News Due:Final joint venture agreement with British Company 4th Screen Advertising including details of its significance for MBA. Price Target: A break through 3 cents should see the next resistance level of 3.5 cents tested. After that the next resistance is at 4.0 cents. Disclosure: Holding MBA



WPG: Western Plains Resources is a company with great potential upside compared to its current market capitalisation. The company has a clear path to the generation of substantial cash flows, commencing in the second half of 2011 with the development of their Peculiar Knob DSO Iron Ore Project. This project is one of the highest grade, lowest impurity deposits left in the country and should be able to attract premium prices for the iron ore it produces. A couple of broker reviews have valuations around $1.80-$1.90 for the company based almost solely on Peculiar Knob. However, the potential for further growth is outstanding with a similar sized DSO deposit at a similar grade located at Hawkes Nest. This could be the next project which gets the go ahead for development. Add to that the potential for a large Magnetite and Hematite operation, which is the subject of a $45m JV with Wisco (Hawkes Nest excluding Buzzard DSO), combined with the potential to develop a substantial clean coal business at the Penrhyn Coal Project and the potential for multiple upside becomes clear. The company will be conducting a roadshow this week in New Zealand and on the East coast of Australia. I anticipate that the story will be well received by brokers and investors which should translate into on market buying so it should be worth watchin WPG this week. News Due: Commitment to develop the Peculiar Knob DSO iron ore project in South Australia. Price Target: With the company conducting a roadshow this week I expect some strong buying to emerge. Based on a measured move I have a target of between $1.05-1.10 for WPG in coming weeks. Disclosure: Holding WPG



Good Luck this week.