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Blog

Technical update: 12 October 2017

Violeta Todorova

IPH (IPH) – double blessed buy

  • The down trend from the February 2016 high has lost momentum over the past seven months and the price has been trading sideways, building a large base.
  • Wednesday's price action broke above key resistance of $5.11 and has confirmed that a new secondary up trend has started. The RSI indicator has moved firmly into the bull market range, suggesting that higher prices are likely to unfold in the months ahead.
  • The first potential upside price target is $5.50, however the price can overshoot to $5.70.

Bellamy's Australia (BAL) – target reached

  • In our last update on September 18, 2017 we discussed the likelihood of the price bouncing in the short term and recommended clients buy the stock at $7.80.
  • A strong run has unfolded over the past week and our upside price target of $9.05 has now been greatly exceeded. The RSI and the stochastic indicators have reached overbought territory, suggesting that the price is likely to pull back in the short term.
  • While we do continue to like the stock over the long term and we believe that higher prices can unfold, we are concerned with the overbought momentum conditions and recommend active clients take profits. The trade generated 25% in 18 trading sessions.

Bubs Australia (BUB) – high conviction buy

  • The correction from the August 2017 high has lost momentum over the past three weeks and the price has been trading sideways building a small base.
  • The RSI and the MACD indicators are turning positive from oversold territory, suggesting that higher prices are likely to unfold in the near term. We see a breakout above minor resistance of $0.56 as highly likely which will confirm that the correction is over.
  • The potential upside price target based on the breakout is $0.70.

Origin Energy (ORG) – accumulate around $6.80

  • In our last update on September 8, 2017 we discussed to proximity to resistance, the overbought momentum readings and the likelihood of the price declining in the short term.
  • The expected pull back has unfolded over the past few weeks and the current price is approaching its key support of $6.71 where initial buying interest is likely to arise. The momentum indicators have reached oversold territory, suggesting that the price is likely to bounce soon. Active investors may consider accumulating the stock around $6.80.
  • The potential near term upside price target is $7.50 - $7.60. Over the medium term, our view on the stock is neutral and we favour further consolidation between $6.71 and $8.04.

Carsales.com (CAR) – double blessed buy

  • CAR has been trading in an up trend since November 2016 which is still technically intact. Wednesday's price action broke above minor resistance of $12.99 suggesting that the correction is likely to be over.
  • The RSI and the MACD indicators are turning higher, pointing to higher prices in the near term.
  • The potential upside price target is $14.00.

More information

Morgans clients can access all recent technical analysis on companies we cover via the research section. 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.