Technical update: 14 May 2018

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
14 May 2018, 11:53 AM

Perpetual (PPT) – heading higher

The decline from the February 2018 high has retraced to its key support of $39.09 which appears solid and is likely to hold. The RSI indicator has broken above its down trend line and the price broke above its minor resistance of $41.87. Both developments are positive and point to higher price levels in the near term.

The first potential upside price target based on the breakout is $45. Over the medium term higher price levels are achievable.

Nufarm (NUF) – tracking well

NUF has been trading in an upward trajectory since February 2018 which is still technically intact. The momentum indicators have improved over the past two months and we are keeping a close eye on key resistance of $9.32.

We see a good probability of the price breaking through its resistance and extending its secondary rally to $9.90.

Metals X (MLX) – tactical buy

MLX has been trading in a consistent up trend over the past two years which is still technically intact. The recent price action rebounded from its long term up trend line and has been trading in an upward trajectory over the past few weeks. Friday's price action broke above its resistance of $0.89 and has confirmed an inverted head and shoulders. The pattern has bullish implications over the medium term.

The first potential upside price target is $1.05. Over the long term, levels towards $1.20 are achievable.

NEXTDC (NXT) – tracking well

NEXTDC has been trading in a strong up trend over the past year which is still technically intact. Last week's price action broke above its key resistance of $7.37 and has confirmed a large rectangle. The pattern suggests that the medium term up trend is likely to continue. The potential upside price target based on the breakout is $8.00.

In the short term, the price may experience a mild pull back as the momentum indicators are overbought. We see such potential short term share price weakness as a buying opportunity.

Baby Bunting Group (BBN) – target reached

In our last update on March 22, 2018 we discussed the likelihood of the price trading higher in the near term and recommended clients buy the stock at $1.36. A strong rally has unfolded over the past week and our upside price target of $1.60 has now been reached. We note an improvement in the momentum conditions and in the price structure, which suggests that the stock is likely to be at a turning point.

We will keep a close eye on key resistance of $1.70 which needs to be broken to confirm that a new up trend has started. We will provide an update in due course.

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.

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