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Technical update: 3 July 2017

Violeta Todorova

Sydney Aiport (SYD) – a top is in place

The rally from the February 2017 low has lost momentum over the past month and the price has been trading sideways within the boundaries of a descending triangle pattern. A large bearish divergence between the price and the RSI indicator has formed on the daily chart, showing that the up trend is losing momentum. In our last update on June 19, 2017 we discussed that selling pressure is building up and highlighted the likelihood of a deeper pull back to $6.90 taking place in the short term. Friday's price action broke below support of $7.19 confirming the bearish descending triangle pattern. 

We now have a set up similar to the August 2016 top and we lower our downside price target to $6.60, however this level could be exceeded.

Transurban Group (TCL) – a top is in place

In our last update on May 5, 2017 we discussed the overbought momentum conditions and the significance of the resistance of $12.65 and recommended clients start trimming positions. A bearish divergence between the price and the RSI indicator has formed on the daily chart throughout May and June 2017 and Friday's price action broke below key support of $11.82. The set up has bearish implications over the medium term and resembles the trend reversal that occurred in August 2016.

The first potential downside price target is $11.40, however the price can overshoot to $10.80 in the months ahead.

Macquarie Atlas Roads (MQA) – under selling pressure

MQA has been trading in a strong up trend since November 2016 which is still technically intact. A small bearish divergence between the price and the RSI indicator has formed on the daily chart throughout May and June 2017 showing that the up trend is losing momentum.

A break below support of $5.59 is likely and will trigger a sell off to $5.10.

Jumbo Interactive (JIN) – double blessed buy

JIN has been trading in an up trend since November 2016 which is still technically intact. The RSI and the MACD indicators have turned positive from oversold territory, suggesting that higher prices are likely to unfold in the near term. The short term down trend line was broken upwards on Thursday, suggesting that the correction is likely to be over. 

Given the positive developments on the indicators front and in the price action itself we see a good probability of the price rallying to $2.90 in the short term.

Tassal Group (TGR) – accumulate

TGR has been trading in a down trend since February 2017, which is still technically intact. Last week's price action retreated to its key support level of $3.68, where initial buying interest is likely to arise. The daily momentum indicators have reached oversold territory, suggesting that the price is likely to bounce soon. The medium term trend is sideways and given the proximity to key support and the oversold momentum conditions we are comfortable opening long positions at current price levels.

The potential near term upside price target is $4.20.

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.