Technical Analysis: 2 August 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
02 August 2019, 6:01 PM

Atomos (AMS) - at resistance

AMS has been trading in an up trend since its listing in December 2018 which is still technically intact. The latest upswing has rebounded to its previous high of $1.45 where resistance has been met three times.

The RSI and the MACD indicators have reached overbought territory suggesting that the price is vulnerable to a pull back in the short term. Such potential share price weakness would present a buying opportunity.

We will provide an update in due course. 

Imdex (IMD) - closing our tactical buy

In our last update on March 31, 2019 we discussed the likelihood of the price trading higher in the short term and opened a tactical buy at $1.07. A strong rally has unfolded over the past two months and our initial upside price target of $1.20 has now been reached and exceeded.

The current upswing has rebounded to its previous resistance of $1.40 where initial selling pressure is likely to arise.

Given the proximity to key resistance, the overbought and diverging momentum conditions, we close our tactical buy. 

JB Hi-Fi (JBH) - close to resistance

JBH enjoyed a strong run since January 2019 advancing from a low of $20.30 to a high of $30.86 in late July 2019. The latest short term upswing has rebounded close to its previous resistance of $31.20 where initial selling pressure is likely to arise.

The weekly and daily momentum indicators have reached overbought territory suggesting that the price is likely to pull back in the short term.

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

Macquarie Group (MQG) - target reached 

In our update on May 13, 2019 we discussed the likelihood of the price declining to $115.00 where we recommended clients buy the stock.

A strong rally has unfolded over the past few months and our price target of $129.50 has been recently reached.

The RSI indicator broke below its support and Friday’s price action broke below minor support of $126.03 suggesting that further weakness is likely in the near term. The initial downside price target is $121.00. 

Nufarm (NUF) - approaching resistance

NUF has been trading in a down trend since May 2018 declining from a high of $9.44 to a low of $3.60 in June 2019.

The stock rebounded over the past two months and the current price action is approaching a band of resistance between $5.50 and $5.65, where initial selling pressure may arise.

The RSI and the MACD indicators are approaching overbought territory suggesting that the price is vulnerable to a short term pull back.  

OZ Minerals (OZL) - close to resistance

OZL has found solid support at $8.80 in late May 2019 and has been trading in an upward trajectory over the past two months.

The price rebounded to $10.55 and approached a band of strong resistance between $10.70 and $11.04.

The momentum indicators are close to overbought territory suggesting that selling pressure is likely to arise around current price levels.

Sonic Healthcare (SHL) - target reached 

In our last update on April 26, 2019 we discussed the bullish implications based on the breakout out of the ascending triangle and the likelihood of the price trading higher in the months ahead.

A strong and consistent rally has unfolded since then and our initial upside price target of $26.50 has now been reached and exceeded.

While at this point there is no sign that the secondary up trend is reversing, we note that the weekly momentum indicators have reached overbought territory, suggesting that a short term pull back could be seen soon.

Treasury Wine Estates (TWE) - overbought 

In our last update on May 12, 2019 we discussed the likelihood of the price bouncing in the near term and recommended clients buy the stock around $14.50.

A strong and consistent rally has unfolded over the past two months with the current price action trading around its previous resistance of $17.60, where initial selling pressure is likely to arise.

The RSI and the MACD indicators have reached overbought territory suggesting that the price is likely pull back in the short term. The initial downside price target is $16.50.

Wesfarmers (WES) - overbought 

WES enjoyed a stellar run since December 2018 posting a fresh all-time high of $40.43 on July 30, 2019.

The daily and weekly RSI and MACD indicators have reached overbought territory suggesting that the near term upside from here is likely to be limited and that the price is vulnerable to a short term pull back.

Active investors may consider using the current share price strength to lighten positions.

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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