Technical update: 20 October 2017
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Senior Technical Analyst
- Date posted:
- 20 October 2017, 8:31 AM
Lendlease Group (LLC) – accumulate
LLC experienced a sharp pull back over the past two trading sessions and the current price action is approaching its band of support between $15.69 and $16.01 where initial buying interest is likely to arise. The RSI indicator has reached oversold territory suggesting that the price is likely to bounce soon. The closer the price gets to support the more buying interest is likely to emerge. Given the proximity to support and the oversold momentum readings we will be looking to accumulate the stock around $16.00.
The potential upside price target in the months ahead is $17.50.
Brambles (BXB) – heading higher
BXB has been trading sideways over the past seven months fluctuating between $8.89 and $10.71. The latest pull back has lost momentum and Wednesday's price action broke above resistance of $9.44, suggesting that higher prices are likely to unfold in the weeks ahead. The first potential upside price target is $9.90 however this level could be exceeded.
Over the medium term, our view on the stock is neutral and we favour further sideways trading.
RCR Tomlinson (RCR) – buy
RCR has been trading in a strong up trend over the past year which remains technically intact. The RSI completed a small double bottom pattern suggesting that higher prices are likely to unfold in the near term. The price broke above minor resistance of $4.49 on Thursday indicating that the short term pull back is likely to be over. Given the price breakout and the positive set up in the momentum indicators we see a good probability of the price trading higher in the near term.
The first potential upside price target is $4.80. Over the medium term, levels toward $5.00 are achievable.
Stanmore Coal (SMR) – take profits
In our last update on September 14, 2017 we discussed the bullish nature of the breakout and recommended clients buy the stock at $0.41. A strong rally has unfolded over the past three days and our upside price target of $0.55 has been reached today. While higher prices are likely to unfold over the long term (potentially to $0.70) the stock is overbought on a short term basis and is vulnerable to a pull back. Therefore, active clients may consider taking profits.
The trade delivered 34% profit in 26 trading sessions.
Steadfast Group (SDF) – target reached
In our last update on September 1, 2017 we discussed the likelihood of the price rallying in the short term and recommended clients buy the stock at $2.69. A good rally has unfolded as anticipated and our initial upside price target of $2.90 has been reached yesterday, delivering an 8% share price increase since our entry.
While we don't see a reversal of the primary up trend at this point, we are of the view that the price is likely to take a breather in the short term.
Morgans clients can login to access all recent technical analysis on companies we cover. If you are interested in finding out more, please contact your nearest Morgans office.
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.