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Technical Analysis: 23 April 2019

Violeta Todorova

Webjet (WEB) – overbought

WEB has been trading in a strong up trend since January 2019 which is still technically intact. The current upswing has rebounded to a band of resistance between $16.71 and $17.73 where initial selling pressure is likely to arise. The RSI indicator has approached overbought territory suggesting that the price is vulnerable to a pull back in the short term.

Given the proximity to a band of resistance and the overbought momentum conditions, we are of the view that the near term upside from here is likely to be limited.

Volpara Health Technologies (VHT) – overbought

VHT has been trading in a strong up trend since February 2019 which is still technically intact. The current upswing has lost momentum over the past week and the price has been trading in a narrow range. The RSI and the MACD indicators have reached overbought territory suggesting that the price is vulnerable to a pullback in the short term.

Such potential share price weakness would provide a buying opportunity.

QBE Insurance Group (QBE) – close to target

In our last update on March 1, 2019 we discussed the implications of the bullish breakout and the likelihood of the price trading higher over the medium term. A slow but consistent rally has unfolded over the past month and Thursday's price action has approached our price target of $13.15.

While at this point there is no clear sign that the rally is complete, we note that a bearish divergence between the price and the RSI indicator has formed over the past month, which shows that momentum is deteriorating. Therefore, we believe that the near term upside from here is likely to be limited.

Class (CL1) – pull back on the cards

CL1 has been trading in a down trend since October 2017 which is still technically intact. The current medium term rally has pushed the momentum indicators into overbought territory and last week's RSI readings completed a descending triangle.

This development shows that momentum has deteriorated and suggests that the price is likely to pull back in the short term.

Nanosonics (NAN) – deterioration in momentum

NAN has been trading in a strong up trend since December 2018 which is still technically intact. A triple bearish divergence between the price and the RSI indicator has formed over the past month showing that momentum is deteriorating.

Given the overbought and diverging momentum conditions we are of the view that the price is likely to take a breather in the month(s) ahead.

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.