Technical update: 28 May 2018

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
28 May 2018, 10:48 AM

Suncorp Group (SUN) – accumulate

SUN has been trading in an upward trajectory since September 2017 which is still technically intact. The RSI indicator has approached oversold territory suggesting that the current pull back may be approaching a turning point. Given the proximity to support of $13.18 and the oversold momentum conditions we are comfortable accumulating the stock at current price levels.

The potential upside price target is $14.40.

Novonix (NVX) – building a base

The decline from the October 2017 high has lost momentum over the past four months and the price has been trading sideways, fluctuating between $0.66 and $1.05. The current short term down swing has lost momentum over the past two weeks and the price is consolidating in a narrow range just above its key support.

A break above minor resistance will confirm that the price is building a large double bottom and will trigger a rally to $1.00 in the short term.

Treasury Wine Estates (TWE) – tactical buy

In our last update on May 10, 2018 we discussed the overbought momentum conditions and the likelihood of the price declining in the short term. The price dropped 22.5% since our last update and now we are of the view that buying interest is building up and support of $15.64 is likely to hold. The RSI indicator has turned positive from oversold territory suggesting that the price is likely to bounce in the short term.

The first potential upside price target is $18.50. Over the long term, higher price levels are achievable.

Caltex Australia (CTX) – approaching key support

CTX has been trading in a downward trajectory over the past two months which is still technically intact. The current price action is approaching its key support of $27.55 where strong buying interest is likely to arise. A large bullish divergence between the price and the MACD indicator appears to be forming on the daily chart suggesting that the decline is likely to reverse course soon.

Any further weakness towards key support would provide a buying opportunity.

Lynas Corporation (LYC) – tactical buy

LYC has been trading in a strong up trend over the past year which is still technically intact. The current pull back has brought the RSI, the MACD and the stochastic indicators into oversold territory, which suggests that the price is likely to bounce soon. The initial upside price target is $2.60 however higher prices are achievable over the medium term.

We are comfortable accumulating the stock at current prices.

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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