Earnings season has commenced and will resume guiding equities markets, although risk aversion is re-entering global financial markets and even Rio Tinto’s (RIO) outstanding Q42009 production update could not quell it. Commonwealth Bank (CBA) and Macarthur Coal (MCC) guiding profits above expectations and WorleyParsons (WOR) downgrading theirs. The vice premier of China calls for increased imports of coal and natural gas to offset domestic shortages, just as Origin Energy (ORG) is set to initiate shipments from New Zealand’s Kupe field, and flooding in Queensland and NSW delay exploration activities for Bow Energy (BOW) and Eastern Star Gas (ESG).

Possible shakers next week include:

Wednesday, 20 January: CSG Limited (CSV) has been on an acquisitions binge, and in December the IT and print solutions firm added its New Zealand opposite number, Onesource Group, to its stable. CSG maintained strong revenue growth throughout the recession, and has recently set historic highs above 2.00. Continued strong returns could set more.

Northern Iron Limited (NFE) initiated ore shipments from their new Norwegian facility in November, but cost overruns getting there forced the miner to find some off-the-cuff financing. The stock hit a high of 2.00 on 16 October, but has since drifted down to 1.30.

Thursday, 21 January: LogiCamms Limited (LCM) recently raised $10 million for multiple acquisitions, including MPA Consulting Engineers. The industrial controls technology company also acquired some new contracts, including one with BHP Billiton. Results here could be interesting.

Meanwhile, AGL Energy (AGK) since its last analysis did fall back and touch the bottom trendline of its narrowing triangle. It then broke above the upper trendline, although not with much momentum, as shown below:

Slow stochastic analysis shows the %K rose above the %D when it touched the lower trendline, signalling the buy. However, at this time the %K has fallen back beneath the %D, indicating the price of AGK could fall a bit more before it breaks the formation entirely:
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Incitec Pivot Limited (IPL) since its initial analysis has broken from its consolidating triangle with dramatic enthusiasm, below:

With the triangle broken, traders should watch for a 50% retraction before the enthusiastic rally continues. A gap created by the 20:1 stock split, in September 2008, remains unfilled between roughly 6.50 and 5.50, and over the long term the stock should rise to fill in that gap:

technical analysis by Craig Liles

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