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Technical update: 11 September 2017

Violeta Todorova

Sonic Healthcare (SHL) – accumulate

SHL has been trading sideways over the past year, fluctuating between $19.72 and $24.58. The current price action is approaching its band of support between $19.72 and $20.69, where initial buying interest is likely to arise. The RSI and the MACD indicators have reached oversold territory, suggesting that the price is likely to bounce soon. Given the proximity to a cluster of support and the oversold momentum readings, we are comfortable accumulating the stock (especially on further weakness around $20.00).

The potential upside price target in the near term is $22.00.

ANZ Banking Group (ANZ) – short term weakness

The rally from the June 2017 low has lost momentum and over the past month the price has been trading sideways, fluctuating between $29.10 and $30.52. Friday's price action broke on a closing basis below support of $29.10, suggesting that lower prices are likely to unfold in the short term. The potential downside price target is $27.50, where we will be looking to accumulate the stock.

Over the medium term, our view on the stock is neutral and we see a good probability the price will trade sideways between $27.50 and $30.50.

National Australia Bank (NAB) – short term weakness

The recovery from the June 2017 low appears to be losing momentum considering the depth of the latest down swing. The momentum indicators are pointing lower suggesting that the price could fall further in the short term. The potential downside price target is $29.00.

Over the medium term, our view on the stock is neutral and as long as support of $29.00 holds we favour sideways trading in the months ahead.

Westpac Banking Group (WBC) – short term weakness

The recovery from the June 2017 low has lost momentum and over the past month and the price has been trading in a downward trajectory. The recent price action broke below support of $31.12 suggesting that the price is in a sideways trading mode. While the momentum indicators are approaching oversold territory we would like to see the price lower before we start accumulating the stock.

Any potential further weakness towards $29.80 - $30.00 would provide a good buying opportunity.

Sydney Airport (SYD) – approaching resistance

SYD has been enjoying a strong rally over the past month which is still technically intact. We note that the RSI and the MACD indicators are approaching overbought territory and the stochastic indicator has formed a small bearish divergence on the daily chart. The current price is approaching a cluster of resistance between $7.48 and $7.79, where selling pressure is likely to arise.

Although at this point there is no sign of a reversal of the current rally, given the proximity to resistance and the overbought momentum levels, we believe that the near term upside from here is likely to be limited.

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.