So far this earnings season, investors have been unimpressed with most reporting companies’ revenue and guidance. Such disappointments are contributing to the current round of risk aversion rocking equities.

Possible shakers next week include:

Wednesday, 4 November: Transfield Services (TSE) on 26 August guided FY2010 net profit as “flat to modest.” If that plays out, TSE will be at the mercy of the current whim, but an upside surprise, based on the 16 September announcement of improving North American contracts, could give TSE a boost through resistance at 4.50.

Thursday, 5 November: Energy Developments (ENE) on 24 August guided FY2010 EBITDA between $135–145 million, higher than market expectations of $128 million, as well as declaring a dividend. Since then the company has rejected a takeover proposal from Pacific Equity Partners as undervalued. If results are toward the upper level of guidance, ENE could move through resistance at 2.70.

Leighton Holdings (LEI) reported full-year results in August with operating profit flat and headline profit down 28% with some rather muzzy impairments. Their order book has grown since then, providing some upside potential. While LEI is already fully priced, it’s fallen several dollars beneath resistance at 38.70 and a good result could return it to that level.

Tassal Group (TGR) had an impressive FY2009 ending 30 June, with volume growth of 31.66%, EBITDA up 29.75%, and a revenue boost of 24.10%. Even in a downturn, it seems, salmon sells.

Friday, 6 November: Babcock & Brown Infrastructure Group (BBI) is selling assets and new shares to raise capital, and signed Brookfield Asset Management and Brookfield Infrastructure Partners for their restructuring and recapitalisation programme. An 8 October announcement put their expected FY2010 EBITDA at $637 million, below expectations of $816 million. The stock last traded at 0.037. If this one disappoints, results could get ugly.

Meanwhile, AGL Energy (AGK) completed its short-term fall-and-touch of the forming triangle’s lower trendline, as discussed earlier this week, shown below:

Next week AGK becomes a short-term buy, with the expectation it will rise back toward the upper trendline. The slow stochastic shows %K levelling off, and a cross back over confirms the buy.

When last discussed, RTP was consolidating within its own triangle formation, with gaps to fill between 160–165 and 190–200:

The lower gap was filled 2 October and a market order placed at 157.37, as the stock RTP touched its trendline and initiated a new climb:

The upper gap was filled and the order closed at 200.66 on 21 October:

A new gap was formed between 184–190 during the run up. On 28 October, a new order was filled at 180.50. We’ll update this trade as RTP’s run continues.

technical analysis by Craig Liles

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