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Galaxy Resources Limited (GXY) announced a 23% increase to its ore reserve for the Mt Cattlin Spodumene Project in Western Australia. The emerging lithium producer said the total “Proved” and “Probable” estimate has increased to 11.4 million tonnes at 1.05% lithium oxide, representing an increase from the previous reserve estimation of 9.3 million tonnes at 1.04% lithium oxide in September 2009.

Catalpa Resources Limited (CAH) reported a consolidated loss for the half-year ended 31 December 2009 of $3.68 million, deepening from a $3.27 million loss in the previous corresponding period. The gold explorer said sales revenue totaled $3.63 million. Catalpa said net assets increased from $44.61 million at 1 July to $108.028 million at 31 December, reflecting the merger with the Lion group of companies during the period.

Leighton Holdings Limited (LEI) said its subsidiary, Leighton Asia, had been awarded a $463 million contract to construct the Tse Uk Tsuen to Shek Yam section of the Guangzhou – Shenzhen – Hong Kong Express Rail Link (“XRL”). The work is for tunnels and ventilation buildings and is expected to begin immediately, with completion slated for 2015.

The contract was awarded by Hong Kong rail operator MTR Corporation, which is in control of the Hong Kong section of the XRL.

The Hong Kong section of the XRL will be underground for the 26 kilometres from the terminus in West Kowloon to the boundary crossing point at Huanggang, Shenzhen, Leighton said.

XRL, Leighton said, is a planned cross boundary transport infrastructure project, providing high-speed rail services between Hong Kong and mainland China.

Meanwhile, Macmahon Holdings Limited (MAH) said that it had entered an agreement with Leighton Asia for some of the work.

"Under its agreement with Leighton Asia, Macmahon will provide management expertise, technical support and participate in delivery of the project. The estimated value of the work for Macmahon is $115 million," Macmahon said in a statement.

At the open, Leighton shares were trading down 6c to $38.94, while Macmahon shares were up 3.5c to 78.5c.

Substantial Shareholder Changes 
10 March 2010

Symbol	Shareholder	+/-	Prior	Now
CQO	Commonwealth Bank of Aust.		5.33	-
CQR	Commonwealth Bank of Aust.		8.84	-
CSL	Capital Group Companies, Inc.		6.5069	7.5178
NFK	Maui Group		18.62	20.08
SPT	Investors Mutual Limited		6.14	-

OrotonGroup Limited (ORL) reported a net profit of $15.4 million for the six months ended 23 January 2010, an increase of 24% on the previous corresponding period. However, the company said it was expecting challenging conditions in the second half.

The clothing wholesaler’s result was on the back of a 9.8% rise in group revenue to $81.6 million, while like-for-like sales performance for the period was 6.3%.

Oroton declared an interim fully franked dividend of 22c per share.

CEO, Sally Macdonald, said the result was achieved in what was generally considered to be a competitive retail climate.

”While trading has remained robust in our Oroton brand, we expect H2 trading to be challenging, especially in the apparel market,” Ms Macdonald said.

”The increased fully franked interim dividend reflects the confidence the Board has in the Group today and its strong financial position.”

The company said EBITDA increased 21.8% to $24.5 million, or 30% of revenue, and EPS increased 23.6% to 37.9c.

”The Group’s focus on cost management has continued to drive total expenses down to 41.8% of revenue in HY10 compared to 46.1% in HY09,” Oroton said.

The company’s net cash position at the end of the financial half-year was $300,000, up from net debt of $1.7 million a year earlier.

Oroton said strong cash flows were maintained with an operating cash flow of $17.9 million for the period.

At the close of trade Wednesday, Oroton shares were trading at $6.28.

Myer Holdings Limited (MYR) said its profit for the six months to 23 January 2010 jumped 38% to $115 million, not including the costs of its recent IPO. The result came on the back of a more modest 2% rise in sales to $1.797 billion.

Including the costs of last November's listing on the ASX, net profit fell to $21.3 million for the 26 weeks to January 23, from $83.2 million in the prior corresponding period.

Looking ahead, CEO Bernie Brookes offered a cautious outlook.

Mr Brookes said that despite sales in the first six weeks of the second half of the year being above the 2% growth in sales seen in the first half, he said he expected that total sales growth in the second half of the year would be in the range of 0% to 2% and the full year to be up 1% to 2%.

”Given the strength of our EBIT performance in the first half, and the ongoing benefits we are leveraging from investments made during the turnaround phase, we remain confident of delivering our prospectus forecast for EBIT of $261 million (up 10.7% on pcp),” Mr Brookes said.

Looking at the result for the last six months, Mr Brookes said it was the seventh straight profit growth for the company.

“These 44 months of profit growth have occurred at the same time as the business being re-engineered during the turnaround phase," Mr Brookes said.

Myer said EBIT was up 11.9% to $181 million.

The retailer also said its gearing was 24%, with net debt reduced to $274 million.

The company also reaffirmed that its expansion strategies remained on track with 15 new stores set to be opened by 2014.

The board declared a 10.5c per share dividend for the six months, saying it was on track to meet its prospectus target of between 20.5c and 21.2c per share.

At the close Wednesday, Myer shares were trading at $3.47.

In the US, the Dow continued to trade around the gain line for the third straight session in light trade. Bank and financial stocks, including some of the most imperilled companies during the GFC, showed the most strength.

In economic news, the US Commerce Department said wholesale inventories fell 0.2% in January, indicating that soon companies will need to ramp up production as consumer demand increases.

The Dow Jones rose 2.95 points, or 0.03%, to 10,567.33, the S&P 500 gained 5.16 points, or 0.45%, to 1,145.61 and the NASDAQ picked up 18.27 points, or 0.78%, to 2,358.95.

Citigroup added to yesterday’s surge, tacking on another 3.7%, while other retail banks were also stronger, including Bank of America and Wells Fargo, up 1.9% and 2%.

AIG jumped 10.6% after investors were happy with the company’s recent asset sales and efforts to repay debt.

Fannie Mae and Freddie Mac were up 2.8% and 2.3% on the general strengthening in the sector.

Among tech stocks, Cisco lost 1% as investors booked profits from recent strong gains.

Search engine Google added 2.9%, while rival Yahoo! posted a 1.6% rise.

Boeing rose 3.3%, with the Dow component trading at 52-week highs.

American Eagle soared 6.1% after the clothing retailer posted better than anticipated results. Rival Abercrombie & Fitch put on 0.8%.

Facet Biotech surged 66% to $27 per share after Abbott Labs said it would acquire the company for that amount.

NYMEX light crude oil rose US60c to settle at US$82.09 per barrel. Exxon Mobil added just 0.7% despite oil touching eight-week highs.

COMEX gold fell US$14.20 to close at US$1,108.10 an ounce.

European Markets

European shares returned to gains Wednesday with banks stronger, while resource stocks were also up. The Greek government’s comments that its financial crisis was over, with support coming from the US government, helped lift markets across the continent.

The benchmark UK FTSE 100 advanced 38.27, or 0.68% to 5,640.57. The French CAC40 climbed 33.54, or 0.86% to 3,943.55. The German DAX put on 50.83, or 0.86% to 5,936.72.

Among the banks, the major gainers were in Greece where Alpha Bank and EFG Eurobank Ergasias SA, the country’s third and second largest lenders, soared 6.2% and 4.9%.

Barclays was up 0.6%, while Lloyds and RBS jumped 3.9% and 3.6%.

BNP Paribas advanced 1%, while in Germany Deutsche Bank added 1.5%.

Among the miners, BHP Billiton and Rio Tinto gained 1.1% and 1.8% respectively. The gains came despite a mixed day for base metal prices on the London Metals Exchange.

Anglo American rallied 2.3%.

In oil plays, BP and Royal Dutch Shell added 0.9% and 1.5% respectively.

Brewer Carlsberg fell 1.5% on reports Russia may ban the sale of beer from kiosks.

Japanese Markets

Japan’s Nikkei closed flat Wednesday after not moving more than 41 points either side of the gain line for the entire session. A year on to the day from the lowest close in over 26 years and the Nikkei has gained 50%.

The Nikkei 225 lost 3.73, or 0.04% to 10,563.92.

Shipping stocks lost the most ground after the Baltic Dry Index fell 1.5%. Kawasaki Kisen Kaisha and Mitsui O.S.K. Lines shed 2.3% and 1.3%.

Mobile-phone carriers KDDI Corp and Softbank slid 1.5% and 1.6%.

Casio Computer rallied 3.4% on reports the company will return to profit next financial year.

Sony and Canon added 1.4% and 0.9%.

Toyota dropped 1.4% following an incident involving the Prius in the US.

Nisshin Steel surged 6.9% ahead of being added to the Nikkei 225.

Hong Kong Markets

The Hang Seng was virtually unchanged as investors booked profit from recent strong gains. Property stocks were weaker, while earnings from some of the major plays buoyed the market.

The Hang Seng added 0.74 points to 21,208.29.

In a wrap of the banks, Bank of China gained 0.5%, while Bank of Communications put on 0.4%.

HSBC shed 1.1%.

One of the market strongest gainers was CITIC Pacific. The property group gained 7.5% after its profit out-stripped expectations by nearly 20%.

State-controlled China Overseas Land & Investment fell 1.3%. Chinese focused Hang Lung Properties shed 1.3%.

Cathay Pacific Airways rose 4.7% as investors snap up stocks ahead of the airline’s reporting tonight. Its stocks are at a 20-month high.

The shippers were weaker as the Baltic Dry Index, a measure of shipping costs, fell 1.5%. China Cosco shed 1.3%.

Off-shore oil producer Cnooc put on 1.1%.

The Australian sharemarket closed the smallest margin below the gain line possible to end an eight-day winning streak. Despite the flat finish to the broader indices plenty of stocks were beyond 1.5% either side of the gain line as investors concentrated on individual stocks rather than sectors as a whole.  

The Australian dollar reach seven-week highs ahead of a jobs report tomorrow that is expected to reveal the sixth consecutive month of rising employment.

In economic news, the Westpac-Melbourne Institute consumer sentiment index rose 0.3 index points to 117.3 points in March despite last weeks RBA interest rate hike.

Meanwhile, according to the Australian Bureau of Statistics the number home loans dropped 7.9% in January on the back of increasing borrowing costs and the diminishing First Home Buyers Grant. It was the heaviest fall in almost 10 years and below an expected rise of 2%.

At the end of the day, the All Ords had added 0.5 to 4,829.8, while the ASX/200 shed 0.1 to 4,820.0. Over 2.6 billion shares worth around $5.3 billion had changed hands.

Miners BHP Billiton and Rio Tinto shed 0.4% and 1.1% to $43.24 and $75.35 respectively as the Materials and Resources sector weakened 0.2% after a mixed night for metals prices.

Atlas Iron put on 4.5% to $2.31 after the announcement it would merge with junior explorer Aurox.

Aurox shares spiked 172% to 73.5c.

Entrenched in the red, Nufarm slumped 82c, or 8.9% to $8.38.

Lihir rallied 3.1% to $2.98 despite the price of gold closing lower overnight. The Papua New Guinean focused miner’s CEO said PNG and the Ivory Coast offer lower levels of sovereign risk to mining companies than Australia.

Orica advanced 30c to $25.31 as it announced the Federal Court’s decision to uphold an amended assessment by the Australian Taxation Office is estimated to have a negative impact on the company of approximately $192 million. The company also said a further cash payment of approximately $126 million may be required with an after tax effect of approximately $92 million.

Property Trusts underperformed, with the sector down 2.2%. Westfield and Stockland lost 1.9% and 2.6% to $12.07 and $4.07.

Mirvac and GPT fell 3.5% and 3.4%. 

The banks displayed strength early on, however stumbled following the release of the home loan data. Westpac and CBA put on 1.3% and 0.9%, while ANZ gained 12c to $23.94 as it received regulatory approvals in the acquisition of the Royal Bank of Scotland’s Singapore and Taiwan businesses.

NAB shed 7c to $26.80. The Banks and Financials sector rose 0.1%

Insurer QBE gained 31c, or 1.5% to $21.41.

The Energy sector slid 0.2% as the price of crude weakened, however remained above US$81 a barrel.

Woodside contributed little, adding 27c to $45.49. 

Origin and Santos were the major drags having dropped 1.7% and 1.3% to $16.66 and $13.90.

Oilfield-engineering company WorleyParsons rose 51c, or 2% to $25.68.

Leighton Asciano and Toll were between 0.8% and 1% in the red as the Industrials sector lost 0.4% overall. 

Alesco slumped 31.6% to $3.12 after the company said its full-year profit would be weaker than expected. UBS and Citigroup downgraded their ratings on the stock in broker reports this morning.

Macquarie Airports shed 6c to $3.26.

Qantas and Virgin Blue countered with gains of 2.5% and 2.7% respectively.

Consumer Staples shed 0.6%. Wesfarmers lost 48c, or 1.5% to $32.23 and Coca-Cola Amatil dropped 29c to $11.17.

Foster’s added 7c, or 1.3% to $5.45.

Telstra rallied 8c to $2.99 after the federal opposition said yesterday that it would resist the Government's proposal to split the company. The Telecommunications sector added 2.6%.

Computershare’s 3.5% rally to $12.44 led the Information Technology sector 2.9% higher.

Around the region, the Nikkei 225 dipped 8.2 to 10,559.4, while the NZSE50 rose 13.0 to 3,226.2. The Straits Times Index gained 21.9 to 2,861.5. The Hang Seng advanced 8.0 to 21,215.5.

Spot gold was trading at US$1,124.40 per ounce, while the Aussie was buying US$0.9155.

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ANZ closer to Asian RBS acquisitions
Australia and New Zealand Banking Group said it has received regulatory approvals in the acquisition of the Royal Bank of Scotland’s Singapore and Taiwan businesses.

At the close, ANZ shares were up 12c to $23.94.

Simpson retires as Aristocrat chairman
Aristocrat Leisure announced the impending retirement of three long standing directors in an update on its board succession planning and renewal programme. The company said David Simpson, Penny Morris and Bill Baker have indicated they would step down from their respective positions.

At the end of the day, Aristocrat shares were up 4c to $4.46.

Adamus to tap the market for $30.5m
Adamus Resources has said it would tap the market for an extra $30.5 million, via a placement and rights issue. The junior miner said the funds would be put towards providing additional capital and accelerating exploration activities at the company’s Southern Ashanti Project in Ghana.

At the bell, Adamus shares were trading unchanged at 40c each.

Aurox and Atlas Iron set to merge
Aurox Resources and Atlas Iron have agreed to merge via scheme implementation agreement (“SIA”) that would see Aurox shareholders receive one Atlas share for every three Aurox shares held. Aurox said the merger implies a price per Aurox share of $0.74 based on Atlas’ last closing price of $2.21, representing a premium of 173% on Aurox's last share price of 27c.

At the finish, Aurox shared had surged 46.5c to 73.5c and Atlas shares were up 10c to $2.31 respectively.

Seek lifts stake in JobStreet
SEEK said it has increased its stake Malaysian based provider of employment websites JobStreet Corporation Berhad from 10.1% to 21.3% after paying a consideration of $23.5 million. The company said JobStreet has strong market positions in Malaysia, Singapore and the Philippines, as well as a significant shareholding in the leading Taiwanese online employment provider 104 Corporation.

At the bell, Seek shares were up 6c at $7.61.

Southern Cross refinances $375m facility
Southern Cross Media Group announced that Southern Cross Media Australia Pty Limited (“SCM”) has entered into an agreement with a consortium of six banks for a refinancing facility of $375 million in place of its existing business level debt facility. The company said the facility is for a four year term and that once completed would position SCM with a conservative and sustainable level of debt with long dated maturity.

At the close, Southern Cross shares were up 8c to $2.13.

Australia and New Zealand Banking Group Limited (ANZ) said it has received regulatory approvals in the acquisition of the Royal Bank of Scotland’s Singapore and Taiwan businesses.

ANZ CEO Asia Pacific, Europe and America, Alex Thursby, said the acquisitions were progressing to plan, with Vietnam and the Philippines completed and Hong Kong, Taiwan, Singapore and Indonesia expected to be completed in the next three months.

The bank said it received approval from the Monetary Authority of Singapore allowing ANZ to operate as a full bank in Singapore with up to 25 service locations and approval from Taiwan’s Financial Supervisory Commission for the RBS Taiwan acquisition to proceed.

“Singapore plays an important role in ANZ’s strategy as a banking and wealth management centre for our affluent retail and private bank clients, a focal point for our institutional clients, and a hub for our product businesses and support functions,” Mr Thursby said.

“Taiwan is a key market in our Greater China strategy and the acquisition gives ANZ a substantial Taiwan business with more than one million customers and a sizable commercial and institutional client base.”

ANZ said the Singapore and Taiwan acquisitions would give it more than 2,000 additional staff and 1.65 million additional customers.

As at 1500 AEDT, ANZ shares were up 12c to $23.94.

Westgold Resources Limited (WGR) posted a consolidated profit for the half year ended 31 December 2009 of $735,248, compared to a loss of about $3.23 million a year earlier. However, the gold and base metals explorer said the profit for the half-year included a reversal of a $2.12 million provision for diminution in investment in relation to the company’s investment in Aragon Resources Limited (AAG) incurred in a prior period. Westgold said excluding the above reversal it incurred a loss of approximately $1.39 million, which was lower than the loss incurred in the prior comparative period due to an impairment of $1.79 million incurred in the prior period.

Who cares what the market thinks!  My take is that CSL shares are back in demand!

 

In our last Off the Chart report we looked at Seven and the demand criteria required to buy the stock for a trade and as SEV now launches itself higher we turn our attention to CSL and use the same “market edge” (everyone needs one!) technique to open up a high probability trade on CSL. This will be the first “glance” at CSL for nearly two years as uptrend qualities have been muted – until now!

To trade the odds that a market edge offers we must take all generated signals as by definition of “the odds” it tells us that not all signals will evolve into a profit and of course we don’t know exactly which ones will and which ones won’t. Yes I know, tough but true, and for those stocks that don’t rise as expected we cut them short and for those that do rise we run them as hard as we can thereby making a profit.

A consistent profit can be generated by buying with a market edge and then selling within a controlled environment of money management rules. And the reason we have money management rules is to bring about the best outcome – making money – so the selling rules need to be robust, smart, and able to turn a profit. The selling is about you taking control of the trade yourself. Something many of us fail to do or fail to think we can. No we should not be the mercy of the market and if you are you’ll lose. Respond to the market yes but our responses should be carefully crafted and acted on thereby taking that control of your trading actions and in turn your destiny.

This may seem simple and yes it sounds simple enough but at any point in time we still don’t know what is going to be a profit and its size and what is going to be a loss until that profit or loss is crystallised. There is always a mental tussle in our minds thus my definition of the stock market being likened to a horse race that has no end – until you sell. Thus there is always a battle in our mind, up or down, of in the case of a horse race, first past the post. The sentence above is the old age question which is unanswerable now but always eagerly answered in hindsight. So can we take that unanswerable question out of the equation and turn a consistent profit? Unequivocally yes!

I play a market edge that tells us the stock market trades higher for the majority of the time so I base all my buy signals on simple soundly based demand weighted price actions that repeat themselves just like trends do, over and over again! How often have you looked at a chart of a stock you have bought and for the life of you, you can’t work out why the hell you got out of it when you did because in fact it was still trending  beautifully, as we now know. Trends in stock prices are so prevalent that we should all do better if only we knew how to control ourselves. We need to learn to follow rules and the answer to doing that successfully is to take “us” out of the equation and let the things we know like trends, stop losses, and money management rules takeover thereby gaining the control essential to successful and consistent trading.

Base your trades firstly on entering using a market edge, whatever that may be, to give yourself every chance of turning a profit and those entries should be simple and rule based and then let your money management rules take over to ensure you cut any developing losses and maximise the opportunities any developing rallies offer. Once you’re in a trade the brutal fact is that it is now about making money and not any stock picking wits or glory.

On the money management and selling side we can have risk assessment, volatility, position size and many other conditions as a part of it. My approach is to use a simple stop loss strategy worked in with buy signals which is then limited by a certain amount of risk to each trade. Some large trends are made up of lots of smaller trend moves so if a stop loss is hit, which protects me against calamity and losses, any subsequent New High, if it occurs (if not I stay neutral), is bought to ensure exposure to any new trends and inevitably using this approach I must then capture the big ones. Recent examples include TPM and CBA. Again not able to lay claim to picking the ones that will take off I simply take all signals. In order to do that you must control the amount of stocks you cover so as your money doesn’t run out when a roaring bull roars loudly and buy signals are in abundance.

Let’s now run the simple “buy” template over CSL which has now swept through the criteria ticking each and every box (rule) to enable me to make a sound “odds on” buy recommendation based on changing demand and supply indications of the CSL share price and this has zip to do with fundamentals or what anyone else thinks.

Key Low Reversal Description: Clear evidence of support at a Trading Range or Key Low that must followed and enhanced by evidence of a increased demand taking on the form of a reversal price structure. (e.g. Candlestick Engulfing pattern)Detailed steps using weekly only data:

1. Key Low price level is hit and it holds.
          - Support for CSL is strong at $29.00/30.00

2. Volume rises in response to new buying.
          - Steady increase in volume since lifting off $29.00/30.00

3. Follow through buying
           - CSL share rallies from the support to $35.00

4. Reversal price action breaks identified trigger point on a weekly basis i.e. Fridays closing price.
            - Predefined “buy” trigger was set at $35.00

5. Stockradar then adds a further filter using Stockradar Trend Intensity rating to give confirmation.
            Trend Intensity rating rises to a qualifying 8 out of 10.

6. Buy the open the following Monday and set stop loss
            Stop loss set at a maximum 10% risking 2% of capital = $32.50

What do I do in bear markets?  Contract to cash and preserve my capital.

To uncover more about the Stockradar strategy and now it works go to Stockradar.com.au

“As a weekly long only equity trader my foremost rule is to protect and preserve while profiting from the uptrend cycle of the stock market and this WILL happen if I follow the rules and that’s why I don’t fear losses.”
– Richard Lie