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Blog

Technical update: 7 May 2018

Violeta Todorova

Medibank (MPL) – target reached

In our last update on April 5, 2018 we discussed the likelihood of the price bouncing in the short term and recommended clients buy the stock. A strong rally has unfolded over the past week and our upside price target of $3.05 has now been reached. The RSI and the stochastic indicators have reached overbought territory suggesting that the price is vulnerable to a short term pull back.

Given the proximity to dynamic support and the overbought momentum readings, we recommend active clients take profits.

Aust Securities Exchange (ASX) – overbought

ASX has been trading in a strong up trend over the past two years which is still firmly intact. The momentum indicators have reached overbought territory and turned lower suggesting that the price is vulnerable to a short term pull back. The potential downside price target is $58.00.

Overall, at this point we don't see a reversal of the primary up trend and we anticipate any weakness will be short term.

APN Outdoor (APO) – overbought

APO had a great run over the past six weeks advancing from $4.07 to $5.55 on Thursday last week. The leading RSI indicator completed a small double top pattern suggesting that the price is likely to pull back in the short term. The potential downside price target is $4.80.

Over the medium term, the price is likely to continue to trade sideways and we will provide an update in due course whenever a tactical buying opportunity arises.

Goodman Group (GMG) – overbought

GMG has been trading in an up trend over the past year which is still technically intact. The RSI and the MACD indicators have reached overbought territory on a weekly and daily basis suggesting that the price is vulnerable to a short term pull back. The initial downside price target is $8.70, however this level could be exceeded.

Although at this point there is no signal that the primary up trend is reversing, tactically we would prefer exposure to Viva Energy (VVR) and Aventus (AVN) as these stocks are near key support levels and are establishing base formations (pointing to higher prices in the months ahead).

Super Retail Group (SUL) – target reached

In our last update on March 16, 2018 we discussed the oversold and diverging nature of the momentum indicators, and the likelihood of the price bouncing in the near term. A steady up trend has unfolded over the past month and our upside price target of $7.40 has been reached and exceeded. While the stock might pull back in the short term, we see a good probability of the price rising further in the months.

We lift our price target to $8.08.

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.