The RBA raised interest rates for the second consecutive month, to 3.5%, and boosted 2009 and 2010 GDP forecasts. The trade deficit, although not as bad as feared, nevertheless hit an 18-month high, with exports to China declining and iron ore exports touching a three-month low.

Possible shakers next week include:

Monday, 9 November: Seven Network (SEV) suffered downturns in advertising revenue and investment writedowns, with profit in the year to June 30 falling 91%. However, their cash position is strong.

Tuesday, 10 November: Credit Corp Group (CCP) in August announced a net income boost of 113%, with a strong cash position. The stock continues to be rated outperform with a target price of 2.40–2.50, where strong resistance lurks.

Fairfax Media (FXJ) suffered EBITDA drop of 27%, also on falling ad revenue, and raised A$624M in equity capital after swinging from a pre-tax profit of A$523M previous to A$351M loss current. The company believes the bottom might have been reached; if that’s true, resistance at 1.75 could give way.

Wesfarmers (WES) announced 22 October that food and liquor sales surged 7.3% yet consumers remained wary. The stock surged to its 52-week high of 28.97 following but has since lost momentum. A good result could see it return.

Wednesday, 11 November: Blue Scope Steel (BSL) repeated its guidance toward another small after-tax net loss 11 October, with moderate improvement in demand and stabilising profits. Resistance at 3.50 continues to hold with the chart triangle tightening.

Biota Holdings (BTA) suffered a day-trader’s sell-off 20 October, falling from 3.33 to 2.88. Earnings, particularly royalties, are expected to shine, however, which could spark a reversal—or not.

Computershare (CPU) disappointed in August, with revenue down 4.5% and profit 9%. Earnings for 2010 are expected to be flat; however, that was based upon the expectation of a strong USD. As that is no longer the case, this could offer an upside surprise.

Fletcher Building (FBU) called 2009 the nadir of the real estate collapse in NZ and US. Although the former is perking up, the latter is still floundering. For the stock, resistance at 7.00 still holds.

Thursday, 12 November: Fleetwood (FWD) has delivered positive surprises the three years past. It could happen again, renewing the uptrend begun in February.

Meanwhile, the DJAU index has made its expected retraction toward its bullish trendline, crossing beneath its MA-50. The retraction could continue until it touches the trendline, at which point the bull rally can be expected to resume.

Technical analysis by Craig Liles

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