Technical update: 25 August 2017

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
25 August 2017, 8:56 AM

Lovisa (LOV) – bullish breakout

Lovisa has been trading in a strong up trend since May 2016 which is still firmly intact. Thursday's price action decisively broke above its key resistance of $4.16 confirming a large rectangle. The pattern has bullish implications and points to higher price levels over the medium term.

The first potential upside price target based on the breakout is $4.93.

Bapcor (BAP) – heading higher

The primary up trend has lost momentum and over the past year the price has been trading sideways, fluctuating between the boundaries of a symmetrical triangle, showing indecision among market participants. Thursday's price action confirmed a small flag, suggesting that the rally from the June 2017 low is likely to continue.

The first potential upside price target based on the breakout is in the range of $6.00 and $6.10.

Beacon Lighting (BLX) – double blessed buy

The decline from the March 2017 high has re-visited its key support of $1.18 which appears solid and is likely to hold. A bullish divergence between the price and the RSI indicator has formed on the daily chart, suggesting that at least a short term bounce is likely to unfold in the near term. The initial upside price target is $1.54, however this level could be exceeded. 

We are comfortable buying the stock at current price levels and we are of the view that the trade has an attractive risk/reward ratio.

Perpetual (PPT) – buy

Perpetual has been trading in an up trend channel since July 2016 which is still firmly intact. The recent pull back has retraced to its long term up trend line crossing at $49.00 where strong support was encountered. Thursday's price action broke above its latest down trend line, suggesting that the correction from the June 2017 high is likely to be over. The RSI indicator completed a double bottom reversal pattern pointing to higher prices in the near term.

The initial upside price target is $56.00. Over the long term, higher prices are achievable.

Coca-Cola Amatil (CCL) – approaching key support

CCL has been trading in a down trend since April 2017 which is still technically intact. The current price action has approached its key support of $7.90 which appears solid and is likely to hold. A large bullish divergence between the price and the RSI indicator has formed on the daily chart suggesting that the price is due for a bounce in the near term. The marginally lower lows over the past two months shows that the selling pressure is easing and we see a good probability of the price building a base above $7.90.

A subsequent break above minor resistance of $8.58 is likely and will trigger a rally to $9.08.

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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