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Blog

Technical update: 23 October 2017

Violeta Todorova

Domino's Pizza (DMP) – target reached

In our last update on September 28, 2017 we discussed the likelihood of the price trading higher in the short term and recommended clients buy the stock at $45.02. A strong rally has unfolded over the past few weeks and the price has filled up the gap and has reached our price target of $50.00. While at this point there is no signal that the rally is over, we have noted that the RSI indicator is close to overbought territory. Therefore, active clients may consider trimming positions.

Over the long term, the price continues to trade within the boundaries of a down trend channel and at this juncture of time the down trend is still intact.

IPH (IPH) – target reached

In our last update on October 12, 2017 we discussed the bullish implications from the breakout and recommended clients buy the stock at $5.16. A strong rally has unfolded over the past week and our initial upside price target of $5.70 has been reached and exceeded. The current price action is close to resistance of $6.04, where initial selling pressure is likely to arise. The RSI and the stochastic indicators have reached overbought territory, suggesting that the price may pull back soon.

Given the proximity to resistance and overbought territory we believe that the near term upside from here is likely to be limited. Therefore, active clients may consider trimming positions.

Class (CL1) – accumulate

The correction from the September 2016 high has lost momentum and the price has been trading sideways over the past eight months. The current pull back has approached its band of support between $2.78 and $2.53 where initial buying interest is likely to arise. The RSI and the MACD indicators have approached oversold territory, suggesting that the price is likely to bounce soon. Given the proximity to support and oversold momentum levels, we are comfortable accumulating the stock.

The potential upside price target is $3.40.

Over The Wire (OTW) – heading higher

The down trend from the September 2016 high has lost momentum over the past five months and the price has been trading sideways building a large base. Friday's price action broke above resistance of $2.30 suggesting that the correction is likely to be over and that higher prices are likely to unfold in the months ahead.

The initial upside price target based on the breakout is $2.65. Over the long term, higher price levels are achievable.

Tassal Group (TGR) – heading higher

The correction from the February 2017 high has lost momentum over the past three months and the price has been trading sideways within the boundaries of a bullish ascending triangle. Friday's price action broke above resistance of $4.06 suggesting that higher prices are likely to unfold in the months ahead.

The potential upside price target based on the breakout is $4.45. Over the long term, levels to $4.85 are achievable.

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.