Technical update: 10 September 2018

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
10 September 2018, 6:54 AM

Incitec Pivot (IPL) – further weakness 

IPL has been trading sideways over the past year fluctuating between $3.18 and $4.08. The recent rally has rebounded to its key resistance where strong selling pressure was encountered. Friday's price action broke below its medium term up trend line and the RSI indicator broke below its bull market support. This suggests that further weakness is likely in the coming weeks.

The potential downside price target is $3.45.

Brambles (BXB) – overbought

BXB has been trading sideways over the past year fluctuating between $8.58 and $10.92. The current rally rebounded to its resistance where momentum appears to be slowing down. While at this point there is no sign of reversal, we note that the RSI and the MACD indicators are in strongly overbought territory. This suggests the likelihood of share price weakness in the short term. 

Over the medium term, we see a possibility of the price advancing further to $11.60 - $12.00.

Aust Securities Exchange (ASX) – further weakness

The ASX has been trading in a strong up trend over the past two years which appears to be losing momentum. Last week's price action broke below its support of $64.87 confirming a double top pattern. The potential downside price target based on the breakout is $61.50. In the short term, the stock is oversold which points to a likely bounce in the week ahead.

We see such potential rebound from here as an opportunity for active investors to trim positions. 

Brickworks (BKW) – overbought

BKW has been trading in a strong up trend over the past year which is still technically intact. Last week's price action posted a fresh all-time high of $17.69, pushing the weekly and daily momentum indicators into strongly overbought territory.

While at this point we don't see a reversal of the primary up trend the price is likely to pull back to $16.20 in the short term and the rally is likely to take a breather in the month(s) ahead. 

Reliance Worldwide (RWC) – building a small base

RWC has been trading in a strong up trend over the past year which now appears to be taking a breather. The large bearish divergence between the price and the RSI indicator and the recent gap down suggests that the price is likely to trade sideways in the months ahead. In the short term, the stock is approaching oversold territory indicating that the price is likely to bounce soon.

The potential upside price target is $5.85. 

More information

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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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