Technical Analysis: 5 November 2018
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Senior Technical Analyst
- Date posted:
- 05 November 2018, 7:37 AM
Wagners (WGN) – accumulate
The sell off from the October 2018 top accelerated last week and the current price action have approached its all-time low of $3.30, which is an important level to watch, as a break below it will have bearish implications. We are of the view that the current decline should be arrested soon as the RSI indicator has entered oversold territory.
The potential upside price target in the near term is $3.85. Given the recent deterioration in momentum conditions we are of the view that the stock is likely to trade sideways over the medium term.
BHP Billiton (BHP) – approaching resistance
The up trend from the June 2017 low has lost momentum over the past five months and the price has been trading sideways, fluctuating between $30.70 and $35.68. The current up swing is approaching its resistance of $35.68 where profit taking is likely to take place in the near term.
The RSI indicator is in a sideways market range (30% - 70%) and we favour further consolidation in the months ahead.
Oil Search (OIL) – accumulate
The up trend from the July 2017 low has lost momentum over the past four months and the price has been trading sideways. The recent break below support of $8.32 confirmed a triple top pattern with a potential downside price target of $7.40, where initial buying interest is likely to arise. The RSI and the MACD indicators have reached oversold territory suggesting that the price is likely to bounce soon.
The potential upside price target is $8.30.
Kidman Resources (KDR) – bullish breakout
KDR has been trading in a down trend since May 2018 which now appears to be reversing direction. Friday's price action broke above resistance of $1.26 suggesting that higher prices are likely to unfold over the medium term. The initial upside price target based on the breakout is $1.60.
The RSI is reaching overbought territory suggesting that a short term pull back is likely to take place soon. Such potential short term share price weakness would provide a buying opportunity for active traders.
Wesfarmers (WES) – oversold
WES has been trading in a downward trajectory over the past two months which is still technically intact. The current price retraced to its previous resistance of $45.00 where buying interest is likely to arise. The RSI and the MACD indicators have reached oversold territory suggesting that the price is likely to bounce soon. The 61.80% Fibonacci retracement ratio measured from the June 2017 low to the August 2018 high highlights $44.60 as another potential level of support. Therefore we are of the view that the current decline is likely to be arrested soon.
The potential upside price target is $48.00.
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