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Blog

Technical update: 2 March 2018

Violeta Todorova

Central Petroluem (CTP) – a bottom is in place

In our last update on December 29, 2017 we discussed our high conviction that the price had bottomed at $0.077 and recommended clients buy the stock at $0.094. A strong rally has unfolded over the past few weeks and Thursday's price action broke above its key resistance of $0.11, confirming that a new secondary up trend is now underway. The breakout is a bullish sign and strengthens our conviction that higher prices are likely to unfold over the medium to long term. Our medium term upside price target is $0.15.

Over the long term, we see levels towards $0.19 as achievable.

Iluka Resources (ILU) – lifting our price target

In our update on November 6, 2017 we discussed the likelihood of the price trading higher and recommended clients buy the stock at $9.42. A strong rally has unfolded over the past few months and our latest upside price target of $10.50 has now been reached. Although the stock is becoming overbought on a short term basis (which makes it vulnerable to a pull back) the long term chart remains constructive and we believe that higher price levels are achievable in the months ahead.

We lift our long term upside price target to $11.50.

Link Administration Holdings (LNK) – buy around $8.30

The rally from the September 2017 how has lost momentum over the past three months and the price has been trading sideways, fluctuating between $8.33 and $9.06. The current short term down swing is approaching its key support of $8.33 where buying interest is likely to arise. The momentum indicators are approaching oversold territory, suggesting that the price is likely to bounce soon. As long as key support holds, our view on the stock is positive and we favour higher prices in the near term. 

The potential upside price target is $9.00.

Aust Securities Exchange (ASX) – overbought

ASX has been trading in a strong up trend over the past two years which is still technically intact. The recent up swing has rebounded close to its all-time high of $60.05 where initial selling pressure is likely to arise. The RSI and the MACD indicators have reached overbought territory suggesting that the price is vulnerable to a pull back in the short term.

Given the proximity to key resistance and the overbought and diverging momentum conditions we see a good probability of the price declining to $56.00 initially, however this level could be exceeded.

ANZ Banking Group (ANZ) – buy around $27.50

ANZ has been trading in a downward trajectory since May 2017 which appears to be losing downside momentum and we are of the view that the price is in the process of building a large base. The marginally higher low posted in February 2018 is an encouraging sign and shows that buying interest is building up. We see a good probability of the price rising to $30.50 over the medium term. In the short term, the stock is overbought and the price is vulnerable to a pull back.

We would be looking to accumulate around $27.50.

More information

Morgans clients can login to view all recent technical analysis on companies we cover by browsing the research section and filtering by 'technical analysis' in the Market Updates 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.