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Blog

Technical Analysis: 11 October 2018

Violeta Todorova

REA Group (REA) – target reached

In our last update on September 7, 2018 we discussed the implications from the bearish breakout and the likelihood of the price declining in the short term. The sell off has intensified over the past week and our downside price target of $80.00 has now been reached. We recommended in our note that we will be looking to accumulate the stock around $80.00 but we noticed deterioration in the momentum conditions on the weekly chart, which suggests that the price is likely to fall further from here.

The new potential downside price target is $75.00.

ERM Power (EPW) – target reached

In our last update on August 27, 2018 we discussed the bullish implication from the breakout and highlighted the likelihood of the price trading higher over the medium term. A slow but consistent rally has unfolded over the past month and our upside price target of $1.85 has almost been reached. We noted a bearish divergence between the price and the RSI on the daily chart, which shows that momentum has deteriorated.

Therefore, we believe $1.80 - $1.85 is likely to act as a strong resistance in the short term. 

Sundance Energy (SEA) – target reached

In our last update on August 24, 2018 we discussed the likelihood of the price trading higher and recommended clients buy the stock at $0.072. A strong rally has unfolded over the past month and our price target of $0.10 has now been reached. The higher lows on the daily chart show that strong buying interest is building up and gives us confidence that the price could subsequently break above its resistance of $0.11.

Therefore, we lift our medium term target to $0.12. In the short term, the RSI indicator reached overbought territory and points to a likely pull back. Such potential short term share price weakness would provide a buying opportunity. 

Otto Energy (OEL) – target reached

In our last update on June 19, 2018 we discussed the likelihood of the price trading higher and recommended clients buy the stock at $0.06. A strong rally has unfolded over the past month and our medium term price target of $0.08 has now been reached. The RSI indicator has reached overbought territory suggesting that the price is likely to pull back in the short term.

Over the medium term, our view continues to be positive and we see levels to $0.09 as achievable. 

Brambles (BXB) – bearish breakout

The rally from the June 2018 low has clearly lost momentum over the past month with the lower high showing that selling pressure is building up. Wednesday’s price action broke below its minor support of $10.60 suggesting that the price is likely to trade lower in the week(s) ahead.

The initial downside price target based on the breakout is $10.00 however this level could be exceeded.  

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: 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.