Wesfarmers Ltd (ASX:WES) HEFFX Highlights

Wesfarmers Ltd (ASX:WES) HEFFX Highlights

Wesfarmers Ltd (ASX:WES) HEFFX Highlights

  • Socks and jocks maker Pacific Brands sold a shipment of leaking rain jackets to the New Zealand Defence Force and then left Wesfarmers to cover the $2.5 million cost of replacing them.
  • That’s according to a statement of claim Wesfarmers has filed in the NSW Federal Court, in an attempt by the retail conglomerate behind Coles, Bunnings and Kmart to claw some of that money back.
  • It may not be the first time Wesfarmers has been on the hunt for acquisitions but the rumour mill is once again alive and well about what the Perth-based conglomerate may be buying.
  • This time the thinking is that Wesfarmers could be considering an acquisition in the industrials space, although exactly what is on its radar is not entirely clear.
  • The logical target would be the Australian listed chemicals and fertiliser maker Incitec Pivot, which is currently worth $5.7 billion. Another company on its radar could be Orica, a business that Wesfarmers was keen to buy before, even thought it would cost a massive $7.7bn at least to take over.
  • The spectre of a supermarket price discounting war is a customer’s dream and a shareholder’s nightmare. And it’s what is responsible for the savaging in the shares in Coles supermarket’s owner Wesfarmers on Wednesday morning.

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.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 41.27.

The projected lower bound is: 38.80.

The projected closing price is: 40.04.

WESFARMER FPO SE closed down -0.560 at 40.120. Volume was 111% above average (neutral) and Bollinger Bands were 21% narrower than normal.

Open         High          Low           Close         Volume
40.500      40.740      40.120      40.120      4,825,217

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

Moving Averages: 10-period       50-period      200-period
Close:                       40.61               42.27              42.57
Volatility:                16                     19                    20
Volume:                   2,281,889      2,436,722      2,349,211

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 5.8% below its 200-period moving average and is in an downward 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 bearish on WES.AX and have had this outlook for the last 47 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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 31.9392. This is not an overbought or oversold reading. The last signal was a sell 3 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 36.83. 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 13 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 -139.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 13 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 9 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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