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Technical update: 21 March 2018

Violeta Todorova

Australian Finance Group (AFG) – double blessed buy

AFG has been trading in a strong up trend over the past year which is still technically intact. The current pull back is deeper than desired, slightly breaking below its support of $1.47, suggesting that the price is likely to take a breather in the months ahead and trade sideways (potentially between $1.40 and $1.70). The RSI and the MACD indicators are approaching oversold territory suggesting that the price is likely to bounce soon. The current share price weakness presents a good buying opportunity for active traders.

The potential upside price target is $1.70. Over the long term, higher prices are achievable.

Apollo Tourism & Leisure (ATL) – tactical buy

ATL has been trading in a correction mode over the past month which is still technically intact. The recent price action retraced to its previous support of $1.52 where initial buying interest is likely to arise. The momentum indicators have reached oversold territory suggesting that the price is likely to bounce soon. Although at this point there is no signal the correction is complete, given the proximity to support and the oversold momentum readings, we are comfortable accumulating the stock around current price levels.

The potential upside price target is $1.70. Over the long term, higher prices are achievable.

Afterpay Touch Group (APT) – tactical buy

The up trend has lost momentum and over the past two months the stock has been trading sideways, fluctuating between $6.26 and $8.16. The current pull back has retraced close to its support where initial buying interest is likely to arise. The RSI and the stochastic indicators have approached oversold territory suggesting that the price is likely to bounce soon. Given the proximity to support and oversold momentum levels, we are comfortable opening long positions around current price levels.

The potential short term upside price target is $7.70.

Cochlear (COH) – overbought

COH has been trading in a strong up trend over the past year which is still technically intact. The RSI and the stochastic indicators have reached overbought territory on a weekly and daily basis, suggesting that the price is vulnerable to a pull back in the short term.

Given the overbought and diverging momentum conditions on the daily chart we see the near term upside from here as limited.

Greencross (GXL) – tactical buy

The down trend from the June 2016 high has lost momentum over the past four months and the price has been trading sideways, fluctuating between $5.03 and $6.56. The RSI and the MACD indicators have approached oversold territory suggesting that support of $5.03 is likely to hold. Given the proximity to key support and the oversold momentum readings we are comfortable buying the stock around current prices.

The potential upside price target is $6.00.

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.