Technical update: 28 August 2017
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Senior Technical Analyst
- Date posted:
- 28 August 2017, 10:23 AM
PWR Holdings (PWH) – double blessed buy
The decline from the October 2016 high has lost momentum over the past five months and the price has been trading sideways, fluctuating between $1.87 and $2.40. In our update on August 10, 2017 we recommended clients accumulate the stock at around $1.89 with a price target of $2.30. Over the past two days the price bounced strongly off its key support and, given the large range of the daily bars, we now believe the price is likely to re-visit $2.40 in the short term. A subsequent break above key resistance of $2.40 is highly likely and will trigger a rally in the months ahead.
The potential medium term upside price target is $2.90.
Asaleo Care (AHY) – buy
The decline from the May 2017 high has lost momentum over the past two months and the price has been trading sideways, fluctuating between $1.33 and $1.54. Friday's price action decisively broke above resistance of $1.54 and has confirmed that the correction is over.
The potential upside price target based on the breakout is $1.80 where we will be looking to take profits.
Magellan Financial Group (MFG) – tactical buy
After reaching an all-time high of $29.50 in June 2017 the stock has started trading in a correction mode which is still technically intact. The current down swing has declined to its previous resistance of $24.15 where initial support is likely to hold. The RSI and the MACD indicators have reached oversold territory, suggesting that the price is likely to bounce in the short term. The potential short term upside price target is $27.00.
Over the medium term, we are of the view that the price will take a breather and trade sideways given the deterioration in the RSI indicator.
KGL Resources (KGL) – double blessed buy
After reaching a high of $0.45 in March 2017 a correction to unwind the overbought and diverging momentum conditions took place. The medium term down trend line was broken recently showing that the correction is losing momentum. A higher low was posted on the daily chart last week suggesting that the buyers are stepping in. A break above resistance of $0.32 is highly likely and will confirm that the correction is over. The potential upside price target based on the breakout is $0.37.
Over the long term, higher price levels are achievable.
OZ Minerals (OZL) – close to resistance
OZL has been trading in an up trend since May, which now appears to be losing momentum. The recent price action has rebounded close to its key resistance level of $10.08 which appears solid and is likely to hold. Friday's price action broke below minor support of $8.39 showing that the up trend is losing momentum. Given the proximity to key resistance and the break below minor support we believe the stock is vulnerable to a pull back in the short term and any subsequent rebound has limited upside potential.
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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.