Technical update: 29 May 2017

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
29 May 2017, 9:52 AM

Bapcor (BAP) – tactical buy

BAP has been trading in a correction mode since January 2017, fluctuating between the boundaries of a down trend channel. The current short term down swing has retraced close to its channel line crossing at $5.00, where initial buying interest is likely to arise. The price is also close to its key support of $4.83, which appears solid and is likely to hold. The RSI and the stochastic indicators are approaching oversold territory, suggesting that the price is likely to bounce soon. Given the proximity to support and oversold momentum levels we are comfortable to start accumulating at current prices.  

The potential short term upside price target is $5.60. A stop loss level should be placed just below $4.80.

Beacon Lighting (BLX) – short term bounce

BLX has been trading in a correction mode since March 2017 and Friday's price action has retraced to its key support of $1.37, where initial buying interest is likely to arise. The RSI and the MACD indicators have reached oversold territory, suggesting that the price is likely to bounce in the short term.

The first potential upside price target is $1.60, however this level could be exceeded.

Sigma Healthcare (SIG) – strongly oversold

SIG experienced a sharp selloff over the past two days with the price declining to its key support of $0.72. This level has been tested many times and is a significant support for the stock. The RSI and the MACD indicators have reached extremely oversold territory, suggested that the stock is likely to bounce in the short term. The first potential upside price target is $0.90, however the price can overshoot.

Over the medium term, we believe the price will trade sideways and we see a good probability of the price fluctuating between $0.72 and $0.95.

Ansell (ANN) – short term weakness

The rally from the February 2017 low has rebounded close to its key resistance of $25.67, where strong selling pressure was encountered on Friday. The price broke on an intra-day basis below minor support of $23.15, suggesting that the price is likely to decline further in the short term. A decisive break on a closing basis below $23.15 is likely and will confirm a distributive pattern is in place.

The first potential downside price target is $22.00, however this level could be exceeded.

MG Unit Trust (MGC) – tactical buy

The decline from the August 2016 high has lost momentum over the past five months and the price has been trading sideways, fluctuating between $0.83 and $1.05. The current short term down swing has retraced to its band of support between $0.83 and $0.87, where initial buying interest is likely to arise. The RSI and the stochastic indicators have approached oversold territory, suggesting that the price is likely to bounce soon.

The first potential upside price target is $1.00, however the price can overshoot to $1.05.

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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