Another Round of Profit Taking

STATE OF THE MARKETS

Another round of profit taking. Global equities launched another round of profit taking activities on Wednesday as investors were nervous about the reports of adverse reactions to covid-19 vaccine in the UK. Two cases of anaphylaxis and severe allergies to the vaccine might hamper the rollout as public are more cautious to take it on. On another note, the unending Brexit drama and stimulus talks in the US, prompted investors to take money off the table for the holidays. The drop can be seen across the board from stocks to crude to gold.

Crude that initially surged higher to $46.25, finally settled lower to $45.52/barrel while gold took a dive to $1825.70, before finished the day around $1,839.10/oz. Funds are flowing into cash and bitcoin (BTC) as Dollar Index (DXY) struggled to close above the 91 mark while BTC closed above its 21 days MA circa $18,560.

Short and medium term accounts showing the greenback and Yen gained in demand while Swiss drifted lower, signaling recent surged in demand was more of profit taking than fresh selling. Kiwi on the other hand, lost the lead in the long term and was sent to the back burner in the short and medium term. Investors remain cautious with Sterling as the Queen’s currency edged lower in the long term.

G8 CURRENCIES SENTIMENTS

** ST refers to Short-Term which is daily turnover, MT is Medium Term which is 
weekly and LT refers to Long-Term which is monthly turnover.

WALL ST MOST ACTIVE

** % Change here refer to price vs previous day price

WALL ST TOP FLOWS

** % change here refers to volume vs. 20 days average volume.

TOP 5 BLOCK ORDERS

OUR PICK – Marathon Oil (MRO, NYSE)

Oil stocks have bottomed out. With vaccines and stimulus underway, we believe the worst is over for oil stocks as evident in heavy hedge funds buying in the last quarter. Oil stocks were under heavy selling pressure as the pandemic rolled on and missed paying dividends for couple of quarters made it worst. We picked Marathon Oil as it resumes paying dividends for Q4, albeit lower at 3 cents a share and at current price that is around 1.68% annualized. Though future outlook of the industry is bleak, this is a strong oil company with healthy balance sheet at $13.79 book value/share and $10.51b enterprise value. Price might dip after the dividend payment but we expect firm support around the 13 days VPOC, circa $6.15. SEC 13F filing revealed that Two Sigma, SG3 and JPMorgan, among others increased their holdings; while Nomura, Renaissance, and UBS reduced their holdings in the last quarter.

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.