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Technical Analysis 14 December 2018

Violeta Todorova

Emeco Holdings (EHL) – oversold

EHL has been trading in a downward trajectory since October 2018 which is still technically intact. The recent down swing has retraced to its 61.80% Fibonacci retracement ratio crossing at $2.00 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 in the short term. 

The potential upside price target is $2.45. Over the medium term, we don't see a reversal of the current corrections as the RSI remains below its down trend line.

Suncorp Group (SUN) – at key support

After reaching a ten year high of $15.96 in August 2018 the price reversed course and has been trading in a correction mode over the past four months. The current price action is approaching its key support of $12.43 where initial buying interest is likely to arise. The momentum indicators have reached oversold territory and a bullish divergence between the price and the RSI has formed over the past two months, suggesting that the price is likely to bounce in the short term.

The initial upside price target is $13.50.

Transurban Group (TCL) – target reached

In our last update on September 16, 2018 we discussed that buying interest is likely to arise around key support of $10.80 and the likelihood of the price trading higher over the medium term. A strong rally has unfolded over the past few months and our price target of $11.80 has now been reached. The current price action is approaching its resistance of $12.21 where initial selling pressure is likely to arise. 

The RSI indicator is approaching overbought territory suggesting that the near term upside from here might be limited. 

Domino's Pizza (DMP) – approaching key support

In our last update on October 25, 2018 we discussed the implications from the overbought momentum conditions and highlighted that resistance of $57.80 is strong and we expected a short term pull back to unfold. The price has been trading in a downward trajectory over the past month greatly exceeding our price target of $50.00. The current down swing is approaching its key support of $38.11 where initial buying interest is likely to arise. The RSI and the MACD indicators are in oversold territory suggesting that the price is likely to bounce soon.

The potential upside price target is $46.00.

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.