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Three top trending ASX stocks

JB Hi-Fi’s stock went on a tear last week, gaining 10.4%. Last Tuesday’s announcement that Carsales.Com Ltd (CAR) and iCar Asia (ICQ) had agreed an extension of their strategic relationship seemed to be taken as a positive for both stocks. Also sentiment certainly seems to be turning on stem cell-focused biotech MesoBlast again.

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Source: Bloomberg

JBH – (BUY)

JB Hi-Fi’s stock went on a tear last week, gaining 10.4%. JBH confirmed its 2016 guidance of A$3.9 billion in sales and net profit of A$143-A$147 million, which buoyed investor confidence in the stock. This was compounded by the unexpected rate cut decision by the Reserve Bank of Australia (RBA) on Tuesday, raising expectations of increased consumer spending. The Federal Budget announcement of new tax cuts to small businesses, and news that JBH has taken over Dick Smith’s locations in Sydney Airport, also helped the stock.

JBH looks to have strong momentum behind its upward move as it closed at an all-time high of A$24.25 on Friday. Last week, it managed three consecutive closes above its upper Bollinger band, and also closed above technical resistance at A$23.60.

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CAR - (BUY)

Last Tuesday’s announcement that Carsales.Com Ltd (CAR) and iCar Asia (ICQ) had agreed an extension of their strategic relationship seemed to be taken as a positive for both stocks. The Federal budget support to small businesses will allow accelerated depreciation of assets up to A$20,000, allowing businesses to instantly claim the cost of new vehicle purchases. The rate cut by the RBA also improves the incentive for Australian consumers to take out new car loans. Australian auto sales have continued to perform well of late, and all of this looks to be feeding into CAR’s stock price performance.

CAR rallied sharply last week, gaining 8.3% last week. But most importantly, it closed on Friday at an all-time high of A$12.73, breaking through key technical resistance at the A$12.15 level. Current momentum looks like it has further to run.

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MSB - (Sell)

Sentiment certainly seems to be turning on stem cell-focused biotech MesoBlast again. It is set to have a conference call on its earnings for the end-March quarter tomorrow at 9am AEST 10 May, which could lead to a lot of volatility in its performance in the short term. But investors have looked pretty keen to get out of the stock of late, ahead of the earnings release.

MSB was our top sell last week, and saw a further 8.7% decline throughout the week. It is consistently closing below its lower Bollinger band and, should this trend continue, it could head down to its technical target of A$1.16. Although a good earnings result tomorrow could see all of this change, a poor result could see it gap down at open pretty close to A$1.16.

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