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Technical update: 13 August 2018

Violeta Todorova

The A2 Milk Company (A2M) – double blessed buy

A2M has been trading in a correction mode since February 2018 which is still technically intact. The current pull back has retraced to its previous support of $9.19 where initial buying interest is likely to arise. The RSI and the MACD indicators are turning positive from oversold territory suggesting that the price is likely to bounce soon.

The initial upside price target is $11.00 however this level could be exceeded.

QBE Insurance Group (QBE) – target reached

In our last update on June 1, 2018 we discussed the likelihood of the oversold nature of the stock and the likelihood of the price rallying in the short term. A strong rally has unfolded over the past two months and our upside price target of $10.40 how now been reached. The RSI indicator has reached overbought territory and the current price action has approached its dynamic resistance crossing at $10.60.

The near term upside from here is likely to be limited.

Credit Corp (CCP) – target reached

In our last update on May 18, 2018 we discussed the probability of the price approaching a turning point and the likelihood of the price rallying in the months ahead. While the stock posted a lower low on an intra-day basis one month after our update, the price stabilized quickly and has rallied strongly over the past month. Our initial upside price target of $21.00 has now been reached.

Given the proximity to key resistance of $23.99, we recommend active clients lighten positions above $23.00.

Alacer Gold Corporation (AQG) – target reached

In our last update on May 4, 2018 we discussed the bullish implication from the leading RSI indicator and highlighted the likelihood of the price trading higher over the medium term. A strong rally has unfolded over the past two months and our upside price target of $2.80 has now been reached.

While at this point there is no reversal of the secondary up trend, the price is approaching its key resistance of $3.04 where initial selling pressure is likely to arise.

Northern Star Resources (NST) – target reached

In our last update on April 27, 2018 we discussed the likelihood of the price rallying in the short term and opened a trading buy at $6.41. A strong rally has unfolded over the past two months and our initial upside price target of $6.90 has been greatly exceeded. Although at this point we don't see a reversal of the primary up trend, we note a small bearish divergence between the price and the RSI indicator on the daily chart, which suggests that the price is vulnerable to a short term pull back.

We recommend active clients trim positions.

More information

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Disclaimer: 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.