Technical update: 4 May 2018

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
04 May 2018, 9:52 AM

Bapcor (BAP) – target reached

In our last update on April 6, 2018 we discussed the likelihood of the price trading higher in the short term and recommended clients buy the stock at $5.59. A strong rally has unfolded over the past few weeks and Thursday's price action broke above key resistance of $6.08. The breakout is bullish and the price may rebound to its key resistance of $6.56 where initial selling pressure is likely to arise. The RSI indicator has reached overbought territory suggesting that the near term upside from here is likely to be limited.

We recommend active clients use the current strength to trim positions.

Cleanaway Waste Management (CWY) – target reached

In our last update on April 16, 2018 we discussed the likelihood of the price trading higher in the short term and recommend clients buy the stock at $1.45. A strong rally has unfolded over the past few weeks and our upside price target of $1.65 has been reached on Thursday. The RSI and the MACD indicators have reached overbought territory suggesting that the price may pull back soon.

Given the proximity to resistance of $1.67 and the overbought momentum readings we are comfortable to start trimming positions.

Oz Minerals (OZL) – target reached

In our last update on April 3, 2018 we discussed the likelihood of the price trading higher in the short term and recommended clients accumulate the stock at $8.99. A strong rally has unfolded over the past few days and our initial upside price target of $9.90 was reached yesterday. We continue to like to stock over the long term and we see higher prices achievable once key resistance of $10.08 is cleared.

In the short term, further upside from here might be limited as the momentum indicators are entering overbought territory.

Woolworths (WOW) – bullish breakout

The rally from the October 2017 low has lost momentum over the past two months and the price has been trading sideways just below its band of resistance. Thursday's price action decisively broke above its key resistance of $27.97 suggesting that higher prices are likely to unfold over the medium term. The potential upside price target based on the breakout is $30.00, however this level could be exceeded.

In the short term, the price may experience a mild pull back as the momentum indicators have reached overbought territory.

Alacer Gold Corporation (AQG) – ready to take off

The down trend from the September 2016 high has lost momentum over the past year and the price has been in the process of building a large base. The leading RSI indicator has broken upwards showing that momentum is improving and that higher prices are likely to unfold over the medium term. We expect the price to break above its key resistance of $2.42 which will trigger a rally to $2.80. 

Any short term share price weakness would provide a buying opportunity.

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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