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 MARKET REPORTS |
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Stocks
CFDs - top five shorts and top five longs for the week
Anthony Anderson, MF Global, November 28, 2008
We asked MF Global if we could take a peek into their CFD book for CFD traders’ most popular stocks. Prepared by Anthony Anderson, Senior CFD Broker, below are the top 5 most popular CFD trades for the week based upon stock price gains and losses and the reasons why.
With the ban on short selling now lifted, CFD traders are back into the swing of things – shorting stocks that they believe will fall in price to secure a swift profit.
Interestingly, traders this week had diverging opinions on mining giants BHP and Rio Tinto – some buying into sell offs, while others aggressively shorted both stocks.
When BHP Billiton shelved its plans to snap up rival Rio Tinto the share price of both miners tanked. Some traders were on the short side of the trade – pocketing big profits from the sell off.
The near 40% fall in Rio Tinto’s share price attracted massive buying both in Australia and London, while other traders added to long positions on BHP Billiton.
Traders continue to support Westpac post St George acquisition, as well as ANZ as its Dividend Reinvestment Plan selling draws to an end.
MF Global Top five stocks
Prepared by: Anthony Anderson, Senior CFD broker
Please note that these are not buy and sell recommendations. They are merely a list of the top trades based upon trader activity, taking into account volume and movement for the previous week. This information does not constitute advice, and is intended as a reference only.
| Ranking |
Stock |
LONG/SHORT |
Reason |
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no.1 |
RIO Tinto Ltd (RIO) |
Long |
Has been out of favour for a while however near 40% fall attracted massive buying both here and in London. |
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no.2 |
Australia and New Zealand Banking Group (ANZ) |
Long |
Good support for the bank as DRP (Dividend Reinvestment Plan) selling draws to an end. |
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no.3 |
Westpac Banking Corp (WBC) |
Long |
Traders continue to support the stock post St George acquisition which has always been viewed favourably. However did see selling after massive rise into close on Tuesday. |
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no.4 |
BHP Billiton Ltd (BHP) |
Long |
Metals improve and dropping of Rio bid saw traders both establishing and adding to long positions. Company looks well placed. |
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no.5 |
National Australia Bank Limited (NAB) |
Long |
With capital raising behind it, CFD traders took advantage of its steep decline as confidence builds in banking sector. |
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| Ranking |
Stock |
LONG/SHORT |
Reason |
|
no.1 |
BHP Billiton Ltd (BHP) |
Short |
Traders showing confidence that stock won’t break through $30 barrier this time. Most shorting has occurred just below this level. |
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no.2 |
RIO Tinto Ltd (RIO) |
Short |
Many traders nervous about large amount of debt and volatility is throwing up plenty of opportunities in both directions. |
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no.3 |
Woodside Petroleum Ltd (WPL) |
Short |
Looks to be strong resistance near $35. Stock has had a good bounce but traders nervous about the oil price. |
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no.4 |
Newcrest Mining Limited (NCM) |
Short |
CFD traders keen to sell into strong rallies and Newcrest fits this bill. Double top just below $26 seen as cause to short. |
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no.5 |
Woolworths Limited (WOW) |
Short |
Very choppy trading and traders playing range more than aggressively shorting the stock. |
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