GPAG Technical Analysis

Transcription

1 Technical Analysis Global Portfolio Advisory Group GPAG Technical Analysis September 6, 26 Global Portfolio Advisory Group, Scotia Capital Inc. Gord Wiesemann / (46) gord.wiesemann@scotiawealth.com Now that the big banks in Canada are done reporting and most if not all of them reflect share prices near all time highs it might be interesting to take a look at the other end of the chart spectrum for opportunity. Financial technology, henceforth referred to as fintech, is in its relative infancy as an industry with new companies hoping to develop and launch front-end consumer and business applications and products including but not limited to peer-to-peer lending and payment processing options. These companies face numerous challenges ranging from regulatory skepticism and scrutiny to data security and of course competition from the established, traditional financial community. To put things kindly, these companies face an uphill battle to win over wide consumer confidence and acceptance while simultaneously appeasing governments and their respective regulatory bodies. That said, if executed properly, this is an area with tremendous growth potential around the world. Cryptocurrencies like Bitcoin are an obvious attraction for the fintech industry but they present a particular regulatory hazard as they have become associated, rightly or not, with illicit business. As such any fintech enterprise hoping to utilize cryptocurrency in its applications and/or processes is likely to encounter particular scrutiny owing to the Currency and Foreign Transactions Reporting Act. For this reason every effort has been made to exclude fintechs that actively incorporate any cryptocurrency in the frontline business model. What follows is a selection of eight publicly traded fintech listings, covering a variety of products and operating across several countries. The technical analysis in each case is focused on prevailing trend conditions and it should be understood that in some cases the listings are very new or otherwise comparatively thinly traded so confidence in the conclusions drawn from the charts may be a little lower than normally desired. That said, every effort has been made to apply the same rigorous analysis through applicable caveats that would be used in any other market sector. It would be advisable to compliment this work with a thorough analysis of financials and local regulatory hurdles before investing. Please be advised that this material is not to be distributed to residents of the European Union Registered trademark of The Bank of Nova Scotia, used under licence. Trademark of The Bank of Nova Scotia, used under licence. Scotia Wealth Management consists of a range of financial services provided by The Bank of Nova Scotia (Scotiabank ); The Bank of Nova Scotia Trust Company (Scotiatrust ); Private Investment Counsel, a service of 832 Asset Management L.P.; 832 Asset Management U.S. Inc.; Scotia Wealth Insurance Services Inc.; and ScotiaMcLeod, a division of Scotia Capital Inc. Wealth advisory and brokerage services are provided by ScotiaMcLeod, a division of Scotia Capital Inc. Scotia Capital Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

2 BofI Holding, Inc % :34:42 AM VWAP:2.72 High: 3.82 Low: 7.5 Chg: -8.% BofI Holding, Inc - EMA-6 BofI Holding, Inc - EMA-2 BofI Holding, Inc - Price 4 After checking trendline resistance for much of the month of July we finally see a breakout confirmed by moving averages and momentum studies. RSI readings did touch and exceed overbought readings in late August but the return to mid-6s levels cools the chart nicely. Support would appear to have been left behind in the $5 range Short term trend confirmed bullish MACD BofI Holding, Inc - MACD Signal (9) BofI Holding, Inc - MACD Divergence Cvol: 25,54 Avg:,353,88 BofI Holding, Inc - Volume 7/5 /5 /6 4/6 7/

3 On Deck Capital, Inc % :4:5 AM VWAP:6.26 High:.5 Low: 5.43 Chg: % On Deck Capital, Inc. - EMA-6 On Deck Capital, Inc. - EMA-2 On Deck Capital, Inc. - Price Prices bumped into trendline resistance on August 9th following a quarterly earnings call. In subsequent trading days we see very short term moving averages cross positively and begin to visibly diverge. Both MACD and RSI bumped into positive readings and confirm one another with matching rises (marked by arrows). Trading has since pushed above trendline resistance and daily high-low ranges have been holding consistently above the day moving average which suggests there is some genuine enthusiasm creeping back into the market after several months of consolidation. Resistance might be found around the $6.78 level but share prices have already pushed into the lowest of the early-year lows without significant hesitation which is an encouragingly bullish sign Short term trend confirmed bullish. 4 2 MACD On Deck Capital, Inc. - MACD Signal (9) On Deck Capital, Inc. - MACD Divergence Cvol: 53,344 Avg: 499,46 On Deck Capital, Inc. - Volume Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug.5

4 Square, Inc. Class A % :5: AM VWAP:2. High: 3.7 Low: 9.89 Chg: -3.3% Square, Inc. Class A - EMA-6 Square, Inc. Class A - EMA-2 Square, Inc. Class A - Price Medium term moving averages crossed positively with a favourable angle of intersect which implies good momentum despite relatively flat RSI and MACD readings. Trading has held consistently above medium term averages since the breakout. Likely to see some resistance around $2.9 but with low RSI this is far from overbought Short term trend confirmed bullish MACD Square, Inc. Class A - MACD Signal (9) Square, Inc. Class A - MACD Divergence Cvol:,56,89 Avg: 3,344,83 Square, Inc. Class A - Volume Nov Dec Jan Feb Mar Apr May Jun Jul Aug.9

5 LendingClub Corp % :59:46 AM VWAP:5.4 High: 4.42 Low: 4.3 Chg: % LendingClub Corp - EMA- LendingClub Corp - EMA-2 LendingClub Corp - Price 6 Recent trading action is encouraging for bullish follow-through but we need to see willingness on the part of market participants to pay a new short term high price to confirm a trend. A new intraday high that takes out $5.9 would do that. Otherwise moving averages and momentum studies are currently positive with some resistance likely resting around $ Short term bull trend pending confirmation MACD LendingClub Corp - MACD Signal (9) LendingClub Corp - MACD Divergence Cvol:,96,72 Avg: 9,97,8 LendingClub Corp - Volume Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2.4

6 Mogo Finance Technology, Inc % :54:48 AM VWAP:.67 High: 6.74 Low:.85 Chg: % Mogo Finance Technology, Inc. - EMA-6 Mogo Finance Technology, Inc. - EMA-2 Mogo Finance Technology, Inc. - Price 9 The market has not been kind to Mogo Finance since the IPO. Volume is still on the low side calling some of the validity of the technicals into question but downtrending moving averages cannot be anything other than bearish. If share prices recover above $2.2 we would likely see improvement on the chart but a trendline breakout here is still quite some distance away. In the meantime it would be prudent not to bottom-fish Medium term bear trend confirmed MACD Mogo Finance Technology, Inc. - MACD Signal (9) Mogo Finance Technology, Inc. - MACD Divergence Cvol: 5,38 Avg: 27,57 Mogo Finance Technology, Inc. - Volume. 7/5 /5 /6 4/6 7/6..

7 TIO Networks Corp % 2:22:45 PM VWAP:2.34 High: 2.24 Low:.85 Chg: 6.47% TIO Networks Corp. - EMA-6 TIO Networks Corp. - EMA-2 TIO Networks Corp. - Price 3. A lengthy consolidation period has ended with a breakout through the $. level and prices have been trending well ever since. Low volumes are again a concern here with respect to the validity of the technicals but moving averages reflect healthy bullish interest in 26. The ascending wedge formation and recent intraday break below trendline support is concerning. A slip below $.8 would undo the positives that this chart currently carries Medium term trend confirmed bullish.5..5 MACD TIO Networks Corp. - MACD Signal (9) TIO Networks Corp. - MACD Divergence Cvol: 26,6 Avg: 69,53 TIO Networks Corp. - Volume.2 /4 /5 4/5 7/5 /5 /6 4/6 7/6.2.

8 Vogogo Inc % :4:49 AM VWAP:.5 High: 3.5 Low:.6 Chg: % Vogogo Inc - EMA-6 Vogogo Inc - EMA-2 Vogogo Inc - Price It doesn't get much more speculative than this. Share prices have been in a confirmed bear trend since May of last year. RSI has however been climbing since May of this year and does now read in positive territory (caution that RSI will show a large move with mere pennies worth of movement in the underlying). Moving averages have yet to cross up while MACD is meaningless Medium term bear trend confirmed MACD Vogogo Inc - MACD Signal (9) Vogogo Inc - MACD Divergence Cvol: 46, Avg: 3,996 Vogogo Inc - Volume /4 /5 4/5 7/5 /5 /6 4/6 7/6.5

9 Yirendai Ltd. Sponsored ADR % 2:5:57 PM VWAP:2.34 High: 23. Low: 6.67 Chg: % Yirendai Ltd. Sponsored ADR - EMA-6 Yirendai Ltd. Sponsored ADR - EMA-2 Yirendai Ltd. Sponsored ADR - Price 45 4 Medium term moving averages crossed up in March and have remained bullishly configured right up to the present. Momentum studies began to diverge with trading levels in early August and prices have corrected sharply since. A test of trendline support at $7. might be in the works, particularly as Chinese officials highlight a crackdown on operations of some p2p lenders. Volumes have steadily ramped up and while momentum readings are negtaive at present, the trend condition remains bullish until proven otherwise Medium term bull trend confirmed MACD Yirendai Ltd. Sponsored ADR - MACD Signal (9) Yirendai Ltd. Sponsored ADR - MACD Divergence Cvol:,855,863 Avg: 638,296 Yirendai Ltd. Sponsored ADR - Volume Jan Feb Mar Apr May Jun Jul Aug

10 Global Portfolio Advisory Group Important Disclosures This material does not include or constitute an investment recommendation, and is not intended to take into account the particular investment objectives, financial conditions, or needs of individual clients. Before acting on this material, you should consider whether it is suitable for your particular circumstances and talk to your investment advisor. The author(s) of the report own(s) securities of the following companies. None. The supervisors of the Portfolio Advisory Group own securities of the following companies. None. This report has been prepared by members of the ScotiaMcLeod Portfolio Advisory Group. ScotiaMcLeod is the full service retail division of Scotia Capital Inc General Disclosures The Scotia Wealth Portfolio Advisory Group prepares this report by aggregating information obtained from various sources as a resource for Scotia Wealth Advisors and their clients. Information may be obtained from the Equity Research and Fixed Income Research departments of the Global Banking and Markets division of Scotiabank. Information may be also obtained from the Foreign Exchange Research and Scotia Economics departments within Scotiabank. In addition to information obtained from members of the Scotiabank group, information may be obtained from the following third party sources: Standard & Poor s, Valueline, Morningstar CPMS and Bloomberg. The information and opinions contained in this report have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. While the information provided is believed to be accurate and reliable, neither Scotia Capital Inc., which includes the Scotia Wealth Management Portfolio Advisory Group, nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Neither Scotia Capital Inc. nor its affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report is provided to you for informational purposes only. This report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation or particular needs of any specific person. Investors should seek advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Nothing contained in this report is or should be relied upon as a promise or representation as to the future. The pro forma and estimated financial information contained in this report, if any, is based on certain assumptions and management s analysis of information available at the time that this information was prepared, which assumptions and analysis may or may not be correct. There is no representation, warranty or other assurance that any projections contained in this report will be realized. Opinions, estimates and projections contained in this report are our own as of the date hereof and are subject to change without notice. Copyright 22 Scotia Capital Inc. All rights reserved