MARKETS SPECTATOR: NAB on the inside lane

National Australia Bank is making its move on its peers and, despite a brief battle looming with its resistance wall, seems set to keep closing.

NAB, the long-time laggard of Australia’s big four, is on the move, especially since the mid-November 2012 lows where its fully franked yield of more than 11 per cent simply became too hard to resist.

As you can see in the chart below, since those November lows NAB has outperformed its closest rival, Westpac by more than 6 per cent in a little over two months.

There’s clearly some rotation going on within the sector as money moves from the outperformers like CBA into the laggards which, mind you, offer an irresistible yield.

image

Source: Iress

However, a closer look at the NAB chart below shows that it is sitting at crucial resistance levels, which may trigger a little bit of short-term profit taking/consolidation.

image
Source: Iress

Nonetheless, I don’t expect it will be too long before the NAB freight train continues on its merry way higher, especially if they manage to sort out something with their troublesome UK assets.

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