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Technical update: 6 October 2017

Violeta Todorova

APN Outdoor (APO) – short term bounce

APO has been trading in a downward trajectory since February 2017 which is still technically intact. The current downswing has approached its previous support of $4.18 where initial buying interest is likely to arise. The RSI and the stochastic indicators have approached oversold territory, suggesting that the price is likely to bounce soon.

The first potential upside price target is $4.70. Over the medium term, levels toward $5.00 are achievable.

Sonic Healthcare (SHL) – approaching key support

SHL has been trading in a correction mode since June 2017 which is still technically intact. The current price action is approaching its key support of $19.72 where initial buying interest is likely to arise. The momentum indicators are approaching oversold territory, suggesting that the price is likely to bounce soon. Although there is no sign that the correction is over at this point, we will be looking to open a partial long position in the low $20.00s. This decision is based on the oversold weekly RSI momentum readings. Once the medium term down trend line on the daily RSI indicator is broken upwards we will have a high conviction that the correction is over and will be looking to top up our long positions.

The potential upside price target over the medium term is $22.50.

Speedcast International (SDA) – approaching resistance

SDA has bounced off its support of $3.21 and has been trading in an upward trajectory over the past month. The current price action is approaching its band of resistance between $4.20 and $4.47, where initial selling pressure is likely to arise. The RSI and the MACD indicators are approaching overbought territory, suggesting that the price may pull back soon.

Although at this point there is no signal that the rally is over, we will be looking to lighten our position in the range between $4.20 and $4.40.

NEXTDC (NXT) – tracking well

NXT has been trading in a secondary up trend since December 2016 which is still technically intact. The weekly RSI indicator remains firmly in the bull market range, suggesting that higher prices are likely to unfold over the medium to long term.

The first potential upside price target is $4.81. A subsequent break above resistance of $4.81 is likely and will confirm the continuation of the primary up trend with an upside price target of $5.20.

Evolution Mining (EVN) – tactical buy

The rally from the December 2016 low has lost momentum over the past four months and the price has been trading sideways, fluctuating between $2.13 and $2.67. The current short term down swing has retraced to its key support of $2.13 where initial buying interest is likely to arise. The RSI indicator has approached oversold territory and the stochastic indicator appears to be forming a small bullish divergence, both pointing to a likely bounce coming in the short term.

The first potential upside price target is $2.40 however this level could be exceeded.

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.