You snooze, you lose: Bacon, lettuce & tomatoes
Just to re-cap on last Thursday’s positions. I stayed short of TESCO (TSCO) at £2.17. Today it’s at £2.07. It is going to fight to stay above £2.00, but on the lack of any positive news it will break the £2.00 support. My target remains £1.75ish. One for the patient. Having said that, a 10p drop for a blue chip is not a bad week’s work.
I remain long of Lloyds (LLOY) at £0.87 with a target of £0.94 (3 weeks). Lloyds is now down 1 pence at £0.86. I will close my long if it drops below £0.84.5 on the close as it would indicate a negative medium term trend. Although Lloyds has had two buy broker calls since I have gone long on the stock, banking in general is not a sector you bet on for the long term rise.
I have taken a long position on BHP Billiton (BLT) at 1,334p. I think commodities are in for a rise and the trend is moving in the right direction with the US dollar weakness and no rising interest rates over there. It seems the tide is turning. My medium term target is £15.00.The fall is just about enough for BLT and the £15.00 target may easily become £20.00, so one to keep on the radar.
I think it is time to put oil on my radar as well. If it manages to stay above $60ish for the next week or so we could be moving in the direction of $100. I have always said that the price of oil was kept low to hurt the Russian economy and I would consider a long either if Vladimir Putin leaves or the price stays above $60 for more than a week or so. I do not and never have bought the idea of oversupply, nor any other geo political or economic reason that has been given for the drop from over $100. For me, it was always about Russia and removing Vladimir Putin.
My stance on the DJIA hitting 20,000 by Christmas 2015 has not changed. I feel we will still make it to that level and interest rates as I have insisted since Jan 2014 will not be going up in the US, no matter how many hints and thoughts on that front from The Federal Reserve.
I feel the Fed will not raise interest rates until we have hit a bubble scenario of S&P 2,200 with PE ratios of 36/38ish. The bull market has certainly another major leg higher to go before the bubble bursts. I said this last week, and I am certainly a lonely voice in this call, yet I remain confident.
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Good luck
Andre Minassian
Always expect success
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