Woolworths results and technical view

Woolworths FY18 results have shown earnings to have been realized in the middle of the company’s previously guided range.  

Markets, while having already known of the pressure the David Jones transformation would place on group earnings, were perhaps further disappointed in the weak performance by the domestic clothing and merchandise business, as well as the large drop in the company’s dividend offering.

Some of the salient features of the results release are as follows:

  • Headline earnings per share down 17.9%
  • Final Dividend -27.5%
  • Woolworths Foods sales up 8.4%
  • Woolworths Financial Services debtors book increased 4.6%
  • David Jones Sales up 2.2%
  • Country Road Group sales up 1.7%
  • Woolworths Fashion, beauty and Home sales down 1.5%

Woolworths Trading Activity

Most traded 23082018

Woolworths has been the second most actively traded share by IG clients in the first hour of trade after its results release.

WW trading activity 23082018

Most of the trading activity (64%) from IG clients on the day of its results (as of 10am Thursday 23 August) were on the buy side.

Technical View

Technical View WW 23082018

The initial reaction to the Woolworths results has seen the price spiking down to short term support at 4875, before starting to rebound. This is noted by the long lower wick on the candle marked with the red Arrow. The sharp rebound after the initial decline does suggest that there is some buying interest at the 4875 level. The long term trend does however remain down and buying off this support level is perceived to carry an elevated degree of risk. Traders looking for a sustainable upside move might prefer to see the price breaking through resistance at 5250 before considering committing to the long side of the trade. A price close below 4875 would consider the continuation of the longer term down trend.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.