I'm firmly in the camp that believes the COT "commitment of traders" futures reports are pointing to a massive commodities rally - some renowned commodities traders are saying it's likely to be the biggest in a decade.
This just popped up on my scanner: Ruralco ASX:RHL. Does anyone know it?
The company is into rural merchandising, real estate and wool & livestock agency services.
They've just formed an alliance with the NAB for rural finance for farmers. Management says the alliance enables them to "drive significant growth in our seasonal finance book with positive impact on our gearing ratio, releasing cash for other opportunities". See today's announcement.
Now considering that the banks are currently the biggest wheat growers in Australia (ie. they now own all the defaulting farms of the last few years) I have to think that NAB would only be looking at a new rural financing venture if they also thought a massive commodities rally was on the cards.
A fall in net profit of 45 to 55 per cent for the year ended September 30 has seen the sp fall and consolidate. Volume is low right now but divergence often gives an entry prior to volume making a move. Best entry is either on breakout of falling resistance or retrace to rising support at about $2.17. Upside looks like about $4.20 on either an inverse H&S or cup n handle with a breather at $3.60 (which is just a strength projection from the last run up).
Call me sheep dipped but I'll have a few of these.
RHL Price at posting:
$2.39 Sentiment: Buy Disclosure: Held
