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Technical Analysis: 8 April 2019

Violeta Todorova

Brambles (BXB) – taking a breather

The rally from the December 2018 low has lost momentum over the past month and the price has been consolidating within the boundaries of a bearish descending triangle. The lower highs forming on the daily chart are a clear sign that selling pressure is building up and we see a good probability of the price breaking below $11.63.

Such a breakout will confirm the descending triangle and could trigger a deeper pull back to $11.00.

Ramsay Health Care (RHC) – at resistance

RHC has been trading in a secondary up trend since October 2018 which is still technically intact. The recent upswing has rebounded to its previous resistance of $66.10 where initial selling pressure is likely to arise. The weekly RSI indicator has reached overbought territory suggesting that the medium term rally is likely to take a breather. A small bearish divergence between the price and the daily RSI indicator has formed over the past month, warning that a deeper pull back is likely to take place soon.

Given the proximity to key resistance and the overbought and diverging momentum conditions we are of the view that the stock is vulnerable to weakness in the near term.

Freedom Foods Group (FNP) – at resistance 

FNP has been trading in a secondary down trend since September 2018 which is still technically intact. The current short term upswing has rebounded close to its previous resistance of $5.49 where initial selling pressure is likely to arise.

The RSI and the stochastic indicators have reached overbought territory suggesting that the price is vulnerable to a short term pull back.

Regis Healthcare (REG) – approaching key resistance

REG has been trading in a secondary up trend since October 2018 which appears to be losing momentum over the past month. The current price action is close to a band of resistance between $3.50 and $3.82 where initial selling pressure is likely to arise. A small bearish divergence between the price and the RSI indicator has formed on the daily chart showing that the rally is losing momentum.

Given the proximity to key resistance and the deteriorating momentum conditions we are of the view that the near term upside from here is likely to be limited.

Scentre Group (SCG) – approaching key support

The decline from the July 2018 high has lost momentum over the past six months and the price has been trading sideways, fluctuating between $3.77 and $4.16. The current short term downswing is approaching its support of $3.77 where initial buying interest is likely to arise and where we would be looking to open long positions. The RSI and the stochastic indicators are close to oversold levels suggesting that the price is likely to bounce soon.

The potential upside price target is $4.10.

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.