Technical update: 16 November 2017

About the author:

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

Commonwealth Bank (CBA) – short term weakness

In our last update on August 31, 2017 we discussed the oversold nature of the stock and recommended clients accumulate around $75.37. A strong rally has unfolded over the past two months with the price reaching a high of $81.56 on Monday. The RSI and the stochastic indicators have reached overbought territory, suggesting that the price is likely to pull back in the short term.

The initial downside price target is $78.50.

National Australia Bank (NAB) – oversold

The rally from the June 2017 low reversed direction and over the past two weeks the price has been trading in a steep correction, erasing most of the hard earned gains. The current price action is close to its key support of $29.00 where initial buying interest is likely to arise. The RSI and the stochastic indicators have reached oversold territory suggesting that the price is likely to bounce soon.

We see the current share price weakness as an opportunity to accumulate. The potential upside price target is $31.50.

Corporate Travel Management (CTD) – oversold

The long term up trend has lost momentum over the past three months and the price has been trading sideways, fluctuating between $20.60 and $24.25. The current short term correction has approached its key support of $20.60 where initial buying interest is likely to arise. The RSI and the stochastic indicators have reached oversold territory suggesting that the price is likely to bounce soon.

Given the proximity to key support and the oversold momentum readings we see a good probability of the price bouncing in the short term. The potential upside price target is $23.00.

Link Administration Holdings (LNK) – target reached

In our update on September 25, 2017 we discussed the likelihood of the price bouncing in the short term and recommended clients buy the stock at $7.39. A strong rally has unfolded over the past two months with the price posting an all-time high of $8.89, greatly exceeding our price target of $8.05.

While at this point there is no reversal signal on the daily chart, we note that the momentum indicators are in overbought territory and we are of the view that the rally is likely to take a breather.

Freedom Oil and gas (FDM) – target reached

In our update on October 2, 2017 we discussed the likelihood of the price rallying in the short term and recommended clients buy the stock at $0.11. A much stronger than originally anticipated rally has unfolded over the past month with the price posting a high of $0.28, greatly exceeding our initial price target of $0.19. The weekly chart shows that the stock is now trading in a primary up trend and once resistance of $0.29 is cleared the next long term upside target is $0.52.

In the short term, the price is likely to pull back as the weekly and daily momentum indicators have reached extremely overbought levels. A potential weakness in the low $0.20’s would provide an opportunity to add to positions.

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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