Technical update: 15 May 2017

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
15 May 2017, 11:12 AM

Brambles (BXB) – target reached

In our last update on April 20, 2017 we discussed the bullish nature of the breakout and the likelihood of the price trading higher in the short term. A strong rally has unfolded over the past few weeks and our upside price target of $10.70 has now been reached. The current price action is close to its band of resistance between $10.73 and $10.92, where initial selling pressure is likely to arise. The RSI and the MACD indicators have reached overbought territory, suggesting that the price is likely to pull back in the short term.

The initial downside price target is $10.00 however this level could be exceeded.

Caltex Australia (CTX) – target reached

In our last update on May 5, 2017 we discussed the bullish nature of the breakout and the likelihood of the price trading higher in the short term. A strong rally has unfolded over the past week and our initial upside price target of $34.00 has almost been reached. The RSI and the stochastic indicators have reached overbought territory, suggesting that the price is likely to pull back in the short term. The potential short term downside price target is around $31.00 which is a good level to accumulate the stock.

Given the recent improvement in momentum conditions we see levels towards $35.00 achievable over the medium term.

AMP Ltd (AMP) – buy around $5.00

AMP has been trading in a recovery mode since November 2016 and the medium term up trend is still technically intact. The recent price action rebounded to its key resistance of $5.50, where initial selling pressure is likely to arise. The RSI indicator completed a top reversal pattern, suggesting that the price is likely to pull back in the short term.

The potential short term downside price target is $5.00. Over the medium term, we continue to like the stock and we see levels towards $5.85 as achievable. Therefore, the expected short term share price weakness would provide a buying opportunity.

Suncorp Group (SUN) – overbought

SUN has been trading in an up trend since November 2016, which is still technically intact. The current short term rally rebounded to its key resistance of $14.70 where initial selling pressure is likely to arise.

The RSI and the MACD indicators have reached overbought territory, suggesting that the price is likely to pull back in the short term. The potential downside price target is $13.70.

APA Group (APA) – approaching resistance

APA has been trading in a strong up trend since November 2016, which is still technically intact. The current price action has approached a cluster of resistance betwen $9.64 and $9.88, where selling pressure is likely to arise once again. The RSI has reached overbought territory suggesting that the rally is likely to pause soon.

Given the proximity to key resistance and overbought momentum levels we believe that the near term upside from here is likely to be limited and that the stock is vulnerable to a pull back.

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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