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Technical update: 8 May 2017

Violeta Todorova

ALS (ALQ) – short term weakness

The up trend from the January 2016 low has lost momentum over the past five months and the price has been trading sideways, fluctuating between $5.59 and $6.60. The recent short term up swing rebounded close to its resistance of $6.60, where selling pressure is likely to arise. The RSI and the stochastic indicators have turned negative from overbought territory, suggesting that the price is likely to pull back in the short term.

The first potential downside price target is $5.90 however this level could be exceeded. The expected short term share price weakness would provide a good buying opportunity.

Orora (ORA) – accumulate

The rally from the December 2015 low has lost momentum over the past nine months and the price has been trading sideways, fluctuating between $2.65 and $3.18. The current short term down swing has approached its key support of $2.65, which appears solid and is likely to hold. The momentum indicators are close to oversold territory, suggesting that buying interest is likely to arise soon. The current price action is in 'accumulate' territory and we consider any potential further share price weakness as a good buying opportunity. 

The potential upside price target in the months ahead is $3.00.

Whitehaven Coal (WHC) – target reached

In our update on April 18, 2017 we discussed the overbought momentum conditions and the likelihood of the price declining to $2.70. While the trading range between $2.43 and $3.44 is still intact we have noted on Friday that the weekly RSI momentum conditions have deteriorated slightly. In our mind this raises the question of how strong the support at $2.43 is. Given the latest developments in our leading momentum indicators we recommend staying on the sidelines until we see how the price will react around its key support.

We will provide an update in due course with an updated entry and price target.

Amcor (AMC) – buy on weakness

AMC has been trading in a recovery mode since March 2017 and the recent price action broke above resistance of $15.49, suggesting that levels towards $16.50 are achievable over the medium term. The price action has been trading in a correction mode over the past week and momentum indicators are approaching oversold territory.

Any further short term share price weakness would provide a good buying opportunity. Our ideal entry level is below $14.80.

Cardno (CDD) – double blessed buy

CDD has been trading in a strong up trend since June 2016, which is still firmly intact. The recent short term pull back found support above its medium term up trend line crossing at $1.20, showing that momentum is still strong. The momentum indicators have turned positive, suggesting that higher prices are likely to unfold in the near term.

The potential upside price target is $1.55.

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.