Wesfarmers Ltd (ASX:WES) Ellerston Capital Sells WES

Wesfarmers Ltd (ASX:WES) Ellerston Capital Sells WES

Wesfarmers Ltd (ASX:WES) Ellerston Capital Sells WES

One of the nation’s top fund managers, the Ashok Jacob-led Ellerston Capital, revealed it had sold its entire stake in conglomerate Wesfarmers and forecasts ­another year of volatility for ­investors after again outperforming the market over the past 12 months.

The Ellerston Australian Share Fund returned a gross 19.2 per cent in the year to June 30, outperforming the S&P/ASX 200 Accumulation Index return of 14.09 per cent despite having no exposure to the big four banks and Macquarie Group, which drove the bulk of the market ­return.

The fund’s return net of fees was 17.86 per cent. It has a concentrated portfolio of no more than 25 Australian-listed stocks.

Wesfarmers Limited is engaged in various business operations, such as supermarkets, liquor, hotels and convenience stores; home improvement; office supplies, and an industrials division with businesses in chemicals, energy and fertilizers, industrial and safety products and coal. The Company’s segments include Coles; Home Improvement; Department Stores, which includes Kmart and Target; Office Works; Industrials, which includes Resources, WIS and WesCEF, and Other. Coles is a supermarket retailer, which operates over 770 supermarkets. Bunnings is a retailer of home improvement and outdoor living products in Australia and New Zealand. Kmart is a retailer with approximately 210 stores throughout Australia and New Zealand. Target operates a network of over 300 stores and sells a range of products for the contemporary family, including apparel, homewares and general merchandise. Officeworks is a retailer and supplier of office products and solutions for home, business and education.

Overall, the bias in prices is: Downwards.

Short term: Prices are stalling.

Intermediate term: Prices are trending.

The projected upper bound is: 41.83.

The projected lower bound is: 39.41.

The projected closing price is: 40.62.

WESFARMER FPO SE closed down -0.190 at 40.680. Volume was 18% below average (neutral) and Bollinger Bands were 57% narrower than normal.

Open         High         Low             Close        Volume
40.760      41.050      40.600      40.680      1,839,992

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period     50-period     200-period
Close:                       40.65            41.85             42.48
Volatility:                15                   19                   20
Volume:                  2,211,552      2,367,102      2,327,302

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

WESFARMER FPO SE is currently 4.2% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of WES.AX at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on WES.AX and have had this outlook for the last 1 periods.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 62.3273. This is not an overbought or oversold reading. The last signal was a buy 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 45.28. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 20 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 40. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 16 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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