Technical update: 26 June 2017

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
26 June 2017, 2:33 PM

Capilano Honey (CZZ) – building a base

The down trend from the May 2016 high has lost momentum over the past three months and the price has been trading sideways and building a base. A triple bullish divergence between the price and the RSI indicator has formed on the daily chart, suggesting that the down trend might be approaching a turning point. A break above resistance of $15.50 is likely and will confirm that a new medium term up trend has started.

The first potential upside price target based on the breakout is $17.00, however over the long term higher price levels are achievable.

Megaport Limited (MP1) – a bottom is in place

The down trend from the September 2016 high has lost momentum over the past month and the price has been trading sideways, fluctuating between $1.81 and $2.18 and building a small base. Friday's price action decisively broke above resistance of $2.18 confirming a rectangle pattern, which suggests that the down trend is over. The breakout has bullish implications and we expect higher prices to unfold.

The first potential short term upside price target is $2.40, however levels towards $2.70 are easily achievable in the months ahead.

Ardent Leisure Group (AAD) – short term weakness

AAD has been trending higher since March 2017 which now appears to be reversing direction. The up trend has lost momentum over the past month and a Class A bearish divergence between the price and the RSI indicator has formed on the daily chart. Friday's price action formed a bearish reversal bar and broke below support of $2.05, which confirms that a short term top is in place.

The first potential short term downside price target based on the breakout is $1.85. Lower levels are feasible over the medium term.

ImpediMed (IPD) – a bottom is in place

The down trend from the August 2016 high has lost momentum over the past month and the price has been trading sideways, fluctuating between $0.53 and $0.79. Friday's price action broke on an intra-day basis above resistance of $0.79 showing that buying pressure is building up. The leading RSI indicator broke above its bear market range, suggesting that higher prices are likely to unfold over the medium term. A decisive break on a closing basis above resistance of $0.79 is highly likely and will confirm that a new up trend has started.

The first potential upside price target based on the breakout is $1.00, however over the long term much higher levels are achievable.

Viralytics (VLA) – buy

The up trend from the October 2015 low has lost momentum over the past seven months and the price has been trading sideways, fluctuating between $0.85 and $1.35. The latest short term down swing has re-visited its key support of $0.85 from where a strong bounce occurred on Friday. The RSI and the stochastic indicators have turned up from oversold territory, suggesting that higher prices are likely to unfold in the near term.

The first potential upside price target is $1.05, however higher levels are achievable. We are comfortable buying the stock at current prices.

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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