Hot stock tips: Western Areas and Bluescope Steel

Online Editor, Switzer Daily
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This week, CMC Markets’ Michael McCarthy “thinks” he likes Australian-based nickel sulphide explorer and producer Western Areas (WSA) after its share price trouncing on Friday.

“Assuming there’s no announcement to the ASX about a problem today, this looks like a buying opportunity to me,” he says.

“Nickel prices have, in my view, bounced off support, and Nickel is a key play in an improving economy.”

Western Areas grabbed investor attention last week, after falling 19.21% to $2.65 on Friday. That’s down from its 52-week high of $3.44.

The share price was dented after reports that Indonesia eased its export ban on nickel ore – leading to expectations of increased supply.

Indonesia banned the shipment of low-grade nickel ore back in 2014 to encourage higher-value smelting industries.

1-year chart – Western Areas (WSA)


Source: Yahoo!7 Finance

Gary Stone of Share Wealth Systems likes flat product steel producer Bluescope Steel Limited (BSL), after the share price showed signs of technical strength.

“BSL’s share price has recently broken above two important resistance levels; the 50% upwards retracement of its three-year decline from July 2009 to July 2012, and the fairly strong resistance zone of $9 to $9.75,” he says.

“This could put BSL on a path towards and above its next resistance levels of $11.50 and $14.20.”

Bluescope Steel previously closed at $10.13 – down from its 52-week high of $10.40.

1-year chart – BlueScope Steel (BSL)


Source: Yahoo!7 Finance

Evan Lucas of IG Markets likes the US banks this week after they displayed “real strength” and a solid earnings season.

In response to earnings results, shares in Wells Fargo rose 1.4%, while JP Morgan rose 0.5% and Bank of America rose 0.4%.

“The selling of Australian banks last week opens a better point for this week,” he notes.

However Lucas is “off energy” this week.

“[The] oil price risk is building, and energy has powered up over the past three weeks. Taking profit here and looking to oil rebase.”

McCarthy dislikes Whitehaven Coal (WHC) this week, after identifying two “good reasons” to sell. One being operational issues, and the other, “[an] underlying coal price that is vulnerable to further falls.”

Our Super Stock Selectors is a survey of prominent analysts, brokers and fund managers. Each week we ask them to name a stock they like, and one they don’t like. We purposely ask for ‘likes’ and ‘dislikes’ instead of recommendations, so it provides an idea of what the market is looking at, rather than firm buys or sells

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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