Technical Analysis: 14 Jan 2014

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
14 January 2014, 12:45 PM

Dexus Property Group (DXS)

The decline from the November 2013 high has lost momentum over the past few weeks and the price has been trading sideways, fluctuating between $0.98 and $1.05. A break above minor resistance of $1.05 is likely and will suggest that higher prices are likely to unfold in the near term. The potential upside price target based on the breakout is $1.11. 

Over the medium term, our view on the stock is neutral and we rate it a hold. Heading higher.

Crude Oil

Oil has been trading in a down trend since August 2013, which remains technically intact. The latest decline retraced to its previous support of US$91.26, where initial buying interest is likely to arise. The RSI and the stochastic indicators have reached oversold territory, suggesting that the price is likely to bounce soon.

The first potential upside price target is in the range between US$96.00 and US$97.00, however over the longer term higher prices are achievable. 

Rio Tinto (RIO)

RIO has been trading in a correction mode over the past week, which remains technically intact. The price retraced to its band of support between $63.03 and $61.37, where initial buying interest is likely to arise. Momentum indicators have approached oversold territory, suggesting that the short term downside from here is likely to be limited and the price should bounce soon. The potential upside price target is $67.00. 

Over the medium term, we believe that the price is likely to take a breather and trade sideways. Accumulate.

S&P 500

The S&P 500 has been trading in an up trend over the past year, which remains technically intact. Last week we discussed the overbought nature of the index and the likelihood of a short term pull back. Last night’s price action broke below minor support of 1823, confirming that the correction is underway. The first potential downside target is 1800, however the index can overshoot to 1770.

Over the longer term, the outlook for the index remains positive and levels towards 1900 are achievable. 

S&P/ASX 200 (XJO)

The XJO has been trading in a correction mode since early January 2014, which is still technically intact. The pull back has been lacking downside momentum, showing that sentiment is still strong. Although the daily stochastic has reached oversold levels, weekly momentum indicators remain overbought pointing to a likely further downside. Therefore, our downside target remains unchanged at 5200.

Over the long term, the outlook for the market remains positive and we believe that levels towards 6000 are achievable.

More information

If you are interested in finding out more, please contact your nearest Morgans office.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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