Technical Analysis: 18 October 2018

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
18 October 2018, 8:50 AM

Sydney Airport (SYD) – double blessed buy

SYD has been trading sideways over the past year, fluctuating between $6.31 and $7.80. The current medium term down swing has retraced to its key support of $6.31 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 in the near term.

The potential upside price target is $7.00 however this level could be exceeded. 

Emeco Holdings (EHL) – target reached

In our last update on September 13, 2018 we discussed the likelihood of the price trading higher in the near term and recommended clients buy the stock at $0.35. The price bounced strongly and our upside price target of $0.38 has been reached. The current short term up swing has approached its resistance of $0.40 where initial selling pressure is likely to arise. The RSI indicator has approached its sideways market resistance suggesting that the price is vulnerable to a short term pull back. Given the proximity to key resistance and the overbought momentum readings, active traders may consider trimming positions.

We will be looking to accumulate the stock on a pull back around $0.33. 

Saracen Mineral (SAR) – target reached

In our last update on September 21, 2018 we discussed the likelihood of the price trading higher in the short term and opened a tactical buy at $1.88. A strong rally has unfolded over the past month and our initial upside price target of $2.10 has now been reached and exceeded. The price has approached its key resistance of $2.31 where initial selling pressure may arise. The RSI and the MACD indicators have reached overbought territory suggesting that the near term upside from here is likely to be limited.

Given the proximity to key resistance and the overbought momentum conditions we close our tactical buy today. The trade generated 18% in less than a month while the XJO declined 4% during the same period of time. 

St Barbara (SBM) – target reached

In our last update on September 14, 2018 we discussed the likelihood of the price trading higher in the short term and we opened a tactical buy at $3.60. The price bounced strongly over the past month and our initial upside price target of $4.00 has now been reached.

While the stock is overbought and may pull back in the short term, there is a good probability of the price trading higher to $4.30 over the medium term. 

Evolution Mining (EVN) – target reached

In our last update on September 14, 2018 we discussed the likelihood of the price trading higher in the short term and recommended clients buy the stock at $2.63. A strong rally has unfolded over the past month and our initial upside price target of $2.95 has now been reached and exceeded. While there is a good probability of the price trading higher over the medium term, on a short term basis the stock is overbought.

Therefore, we close our tactical buy. The trade generated 16% in just over a month. 

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.

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