Technical update: 17 November 2017

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
17 November 2017, 4:07 PM

Woodside Petroleum (WPL) – buy

In our last update on November 8, 2017 we discussed the overbought nature of the stock and the likelihood of the price declining in the short term. The price pulled back to $30.34 on Wednesday dropping 9% in six trading sessions. The RSI and the stochastic indicators are close to oversold territory suggesting that the price is likely to bounce soon.

Given the proximity to its previous resistance of $30.06, which is now likely to act as a support and the oversold momentum reading we are comfortable accumulating the stock at current price levels. The first potential upside price target is $32.50, followed by $33.90.

Change Financial (CCA) – lifting our price target

In our last update on October 2, 2017 we discussed the likelihood of the price trading higher and recommended clients buy the stock at $0.70. A strong rally has unfolded over the past month and the price greatly exceeded our price target of $0.80. Thursday’s price action decisively broke above resistance of $0.90, suggesting that higher prices are likely to unfold over the medium term.

We lift our price target to $1.15. Any weakness in the short term would provide an opportunity to top up positions.

ImpediMed (IPD) – breakout seems imminent

In our last update on September 22, 2017 we discussed the likelihood of the price declining in the short term and recommended clients buy the stock around $0.70. A strong rally has unfolded over the past month and current price is testing its key resistance of $0.88 where an upward breakout appears to be imminent. This view is based on the significant improvement of the leading RSI indicator and the higher lows in the price, which shows strong buying support.

The first upside price target based on the breakout is $1.15. Over the long term, we believe higher price levels are achievable.

South32 (S32) – tactical buy

S32 has been trading in a strong up trend over the past two years which is still technically intact. The current pull back has retraced close to its previous resistance of $3.07 where support is likely to arise. The RSI and the stochastic indicators have reached oversold territory, suggesting that the price is likely to bounce soon.

The potential upside price target is $3.65.

Elders (ELD) – overbought

ELD has enjoyed a strong rally since September 2017 with the price gaining 39% over the past two months. While at this point there is no reversal signal evident on the chart, we note that the RSI and the MACD indicators have reached overbought territory, which shows that the stock is likely to take a breather in the short term.

Over the long term, the primary up trend is still in play, but with the weekly momentum indicators also in overbought levels, we rate the stock a hold.

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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