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Blog

Technical update: 12 March 2018

Violeta Todorova

Domino's Pizza (DMP) – closing our tactical buy

In our last update on March 5, 2018 we discussed the likelihood of the price trading higher in the short term and we opened a tactical buy at $39.80. A strong rally unfolded over the past week and our upside price target of $44.00 has now been reached.

Although we will close our tactical buy today which was a short term call, we see a good probability of the price rising further to $48.00 - $49.00 in the months ahead.

GrainCorp (GNC) – target reached

In our last update on February 19, 2018 we discussed the likelihood of the price trading higher and recommended clients buy the stock at $7.56. A strong rally has unfolded over the past few weeks and our second upside price target of $8.40 has now been reached. Although at this point there is no reversal sign on the chart we note that the momentum indicators have reached overbought territory.

Active traders may consider trimming positions.

Cromwell Property Group (CMW) – switching from CMW into SGP

CMW has been trading sideways over the past year fluctuating between $0.88 and $1.04. The current short term rally has rebounded to its resistance of $1.04 where initial selling pressure is likely to arise. The RSI and the MACD indicators have approached overbought territory, suggesting that the near term upside from here is likely to be limited.

Given the proximity to key resistance and the overbought momentum conditions, we recommend clients switch to Stockland (SGP) which has a very good probability of trading higher in the months ahead.

Stockland (SGP) – buy

SGP has been trading in a downward trajectory over the past year which is still technically intact. The recent down swing has lost momentum and the price has been trading sideways consolidating within the boundaries of a small bullish ascending triangle. A break above minor resistance of $4.15 is highly likely and will trigger a rally to $4.50.

We are comfortable accumulating the stock at current price levels before the anticipated breakout occurs.

Platimun Asset Management (PTM) – buy

PTM experienced a sharp sell-off over the past month, declining from $8.72 to $5.83. The decline pushed the momentum indicators into strongly oversold territory, which suggests that there is a good probability of the price bouncing in the short term. The correction has lost momentum over the past week and the price has been consolidating within the boundaries of a small ascending triangle. Given the oversold momentum conditions, we are of the view that there is a good probability of the price bouncing in the short term.

The potential upside price target is $6.80.

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.