Technical update: 21 August 2017

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
21 August 2017, 10:59 AM

QBE Insurance Group (QBE) – accumulate

QBE encountered resistance around $13.60 in May 2017 and has been trading in a downward trajectory since then. The current decline is approaching its previous support/resistance level of $10.45 where initial buying interest is likely to arise. The RSI indicator has reached oversold territory, suggesting that the price is likely to bounce soon. 

The first potential upside price target is $11.65. Over the medium term, levels towards $12.40 are achievable.

Woodside Petroleum (WPL) – short term bounce

The down swing from the May 2017 high has lost momentum and over the past two months the price has been trading sideways, fluctuating between $28.45 and $30.77. The current price is trading close to its support of $28.45 where initial buying interest is likely to arise. We see a possibility of the price bouncing to $30.50 in the short term.

Over the medium term, our view remains neutral and we rate the stock a hold.

Origin Energy (ORG) – breaking higher

The correction from the May 2017 high has lost momentum over the past two months and the price has been trading sideways, fluctuating between $6.71 and $7.29. Friday's price action broke above resistance of $7.29 suggesting that higher prices are likely to unfold in the near term. The potential upside price target is $8.00. 

Overall, the primary up trend still remains intact but we have noticed a large bearish divergence between the price and the RSI indicator, which suggests that the up trend could take a breather in the months ahead.

ResMed Inc (RMD) – accumulate

RMD has been trading in a correction mode since July 2017 which is still technically intact. The current price action is trading close to its key support of $8.93 which appears solid and is likely to hold. The momentum indicators are in oversold territory, suggesting that the price is likely to bounce soon.  

The first potential upside price target is $9.80 however over the long term higher prices are achievable. We are comfortable accumulating around current price levels.

Flight Centre Travel (FLT) – at resistance

Despite prolonged weakness over the past year, the stock has found buying support in March 2017 and has been trading in a strong up trend since then. The current price action has re-visited its key resistance of $47.40 (May 2015 high) where selling pressure is likely to arise. The weekly and daily momentum indicators are in overbought territory and we noted a large bearish divergence between the price and the RSI on the daily chart. 

The proximity to resistance and the overbought and diverging momentum conditions suggest that the price is vulnerable to a pull back in the near term.

More information

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Disclaimer(s): Analyst may own shares in some or all of the companies mentioned.

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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