Technical Analysis: 11 Mar 2014

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
11 March 2014, 8:41 AM

Copper

The decline from the December 2013 high extended and Friday’s price action broke below support of US$3.12. The breakout has bearish implications in the short term and suggests that further weakness is likely to be seen in the short term. The next potential downside target is US$2.98, where initial support is likely to hold.

Over the medium term, our view on the commodity is neutral and we believe that the price will continue to trade sideways between US$2.98 and US$3.44.

Pacific Brands Limited (PBG)

PBG has been trading in a down trend over the past year, which remains technically intact. The price retraced to its previous support of $0.50 where initial buying interest is likely to arise. Momentum indicators have reached oversold territory, suggesting that the price is likely to bounce in the short term. The potential upside price target is in the range between $0.60 and $0.65.

Overall, at this point there is no sign suggesting the reversal of the down trend and we only favour a short term bounce. ST rally.

Santos (STO)

The down trend from the September 2013 high has lost momentum over the past month and the price has been consolidating within the boundaries of an ascending triangle. The pattern has bullish implications and suggests that higher prices are likely to unfold in the months ahead.

A break above resistance of $14.38 will confirm the pattern and trigger a rally to $15.50. Until such a breakout we will remain cautious and stay on the sidelines. Building a base.

Super Retail Group (SUL)

In our last update on the 5th of February 2014 we recommended buying the stock at $10.50 and our initial upside price target of $11.50 has now been reached. Given the bullish shape of the consolidation (ascending triangle) we believe that higher price levels are likely to unfold in the months ahead. A break above resistance of $11.69 is likely and will confirm the pattern.

The next potential medium term upside price target based on the breakout is $13.88. Double blessed buy.

S&P/ASX 200 (XJO)

The recovery from the February 2014 low has lost momentum over the past few weeks and the index has been trading sideways, fluctuating between 5340 and 5462. A small bearish divergence between the price and the RSI indicator has formed on the daily chart, suggesting that the bulls are running out of steam. A break below minor support of 5340 will confirm a small double top and trigger a pull back to 5220. We believe that the potential weakness will be short lived and subsequently the bulls will manage to regain strength and push the prices higher.

Once resistance of 5462 is cleared the next upside target is 5584.

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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