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Top 10 CFD stocks for the week

Which stocks are CFD traders targeting? Anthony Anderson, head of CFDs at MF Global gives us the top 10 stocks to go long and short

By Expert Panel | 15.03.2010

By Anthony Anderson, MF Global

For two weeks running QBE Insurance has been the number one stock to long for CFD traders. The CFD strategy employed - which is to buy quality stocks that have been temporarily sold down - was successfully applied to QBE last week.

Suncorp Metway was another stock on the radar following an average half-year result. At the moment Suncorp Metway seems to be putting in a nice base and traders are happy to accumulate.

Japan steemakers have agreed to a 55% hike in coking coal, which was at the lower end of expectations. Iron ore negotiations on the whole seem to be heading in the right direction for BHP, which provided fuel to long the stock last week.

Traders looking to short BHP, however, chose the $44 level, which has been resistance for over a year.

As for other stocks to short, Newcrest Mining has had a stellar run - with $34.50 viewed as a top at the moment by many technical traders.

If you're a little unsure of the terminology, when you go 'long' a CFD, you profit if the price of the CFD rises (you buy the CFD in the hope that when you come to sell the CFD at a later date, the share price of the underlying stock has risen).

When shorting a CFD you profit if the price of the CFD falls (you sell a CFD, in the hope that when you come to buy the CFD at some time in the future, the share price of the underlying stock has fallen).

Take a look at the top CFD stocks targeted by traders below plus the reasons why:

Long positions - Top 5 (3 March - 10 March)

Ranking	Code	Stock	Position Held	MF Global's Commentary
1	QBE	QBE INSURANCE GROUP LIMITED	Long	Number one stock last week and traders continued that aggressive buying early this week for stunning results. Traders strategy to buy quality sold down stocks paid handsomely once again.
²	SUN	SUNCORP-METWAY LTD	Long	Followed QBE down on the back of sector selling and an average half year result. Stock however looks to be putting in a nice base and traders keen to accumulate.
3	BHP	BHP BILLITON LTD	Long	Japan steelmakers agree to 55% price hike in cooking coal. This was at the lower end of expectations, however more importantly Iron Ore negotiations appear to be heading in the right direction for the company.
4	NAB	NATIONAL AUSTRALIA BANK LTD	Long	Favoured bank again. Very solid bounce to hit 200 day moving average. Stock is at pivotal level and next move will be significant.
5	NUF	NUFARM LTD	Long	We saw aggressive buying leading up to the record date of stock going ex-entitlement to 20% takeover of stock by Sumitomo. Traders were able to sell 20% of their holdings at a generous premium.

Short positions - Top 5 (3 March - 10 March)

Ranking	Code	Stock	Position Held	MF Global's Commentary
1	BHP	BHP BILLITON	Short	$44 level has been resistance for over a year. Traders keen to short the stock leading into that level in directionless market.
2	RIO	RIO TINTO LTD	Short	RIO failed at $77 level. Stock has also put in a solid performance, however does look overbought in some traders view.
3	NAB	NATIONAL AUSTRALIA BANK LTD	Short	Stock has spent the week jumping either side of the 200 day M.A. as mentioned above. Divergent views as to which way it moves next.
4	ANZ	AUST AND NZ BANKING GROUP	Short	Stock has outperformed over previous few weeks. Has flat lined like many stocks over the past week. Failure to break convincingly above $24 level has been viewed as a sell signal to some.
5	NCM	NEWCREST MINING LIMITED	Short	Same theme evident here of shorting stocks that have had a stellar run. $34.50 is viewed as a top at the moment by many technical traders.