The last session in August only partially fulfilled the expectations of share holders awakened after a very good behavior of the market the previous day.
the WIG20 index from the beginning of Wednesday’s session had trouble with the continuation of the rebound up. At the same time they increased turnover amounting to blue chips 662 million zł. Thus, polarization is increasing expectations of the economic situation in the coming weeks. On the broad market but probably closer to the realization of profits in the segment of medium and small companies.
From the point of view of technical analysis WIG20 index since May this year. moves in the lateral trends. Relatively large fluctuations in the index is limited from the bottom level of 1,750 points. From the top on the other hand we have the first resistance level of 1,820 points. and above zone 1.850-1.870 points. In the short term, despite Tuesday’s fortifications, still were generated signals to reverse the downward trend that began in mid-August this year.
The strong appreciation of tempting profit taking
indexes medium small companies have had a significant appreciation. Both mWIG40 and sWIG80 reached out to the strong supply dams. For mWIG40 it is described yesterday the peak of May 2015. (3,950 pts.). In the case of sWIG80 corresponding maximum was slightly exceeded. The index of small companies raised above the level of 14,100 points. and found himself in the vicinity of the upper limit of the medium-term channel growth (14,200 pts.).
It seems that the prolonged uncertain situation on large companies can now result in a slightly larger profit-taking on the qualities of mid and small caps. The first negative signal for sWIG80 would be a return below the level of 14,100 points. At the risk of this scenario indicates a negative divergence, which appeared on the short-term oscillators.
Nervous session on Wall Street. Still no breakthrough
The beginning of Wednesday’s trading overseas brought a decline in the S & amp; P500. Investors reacted to the published report on the state of oil stocks, which showed a significantly greater increase in inventories of raw materials than expected. As a result, the price of Brent crude oil fell to 47.0 USD per barrel. Investors are now awaiting Friday’s report from the labor market (the number of new jobs in non-farm payrolls and unemployment rate in August this year.). Data can set the market sentiment in the coming weeks.
Ciech – a record quarterly chemical company
Ciech had in the second quarter of 2016 years 161.9 million zł net profit attributable to shareholders of the parent company to 86.2 million zł year earlier. The result was above the market consensus of 116.6 mln zł.
Comment: Ciech has had a record quarter in terms of the level of net profit. The company benefited from the weakening of the zloty and cheaper energy. Increasing involvement of its activities in Africa. The biggest gains within the whole group generated a segment of sodium in the first half giving up 87 percent. operating profit EBITDA. In addition, the results have been overclocked by one-off events. The quality of the net profit is confirmed by the high cash flow from operating activities.
J.W. Construction – the developer on track to meet annual forecasts
J.W. Construction Holding reported a 26.1 million zł consolidated net profit in the first half of 2016. Zł to 5.1 million profit a year earlier, the company said in a report. Operating profit amounted to 37.47 million zł to 14.3 million zł profit a year earlier. Consolidated sales revenues reached 255.03 million zł in the first half. 2016. Against 127.52 million zł year earlier.
Comment: In the first quarter of this year. the company passed the loss of nearly 10 million zł. The second quarter brought a definite improvement while and net profit of more than 35 million zł. At the same time the strong growth recorded item of revenue. Revenues for the second quarter. 2016. Company recognized the sale of 600 apartments – three times more than the same period last year. JW Construction probably will fill this year’s forecast sales of 1.5-2.0 thousand. new units (in the first half of the year has sold 733 flats). The advantage is the developer owned a large land bank.
the above text is an expression of personal opinion and the views of the author and should not be construed as a recommendation to buy or sell securities.
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