Technical Analysis: 12 December 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
12 December 2019, 1:32 PM

AP Eagers (APE) – Double Blessed Buy

After posting a record high of $14.49 In September 2019 the stock reversed course and the price has been trading in a correction mode over the past three months.

The price retraced close to its previous resistance and its 61.80% Fibonacci ratio crossing at $9.00 where support is likely to be encountered in the short term.

A small bullish divergence between the price and the RSI indicator has formed on the daily chart suggesting that the price is likely to bounce in the short term. The medium term down trend line on the leading RSI indicator has been broken upwards, showing that momentum is improving. The first potential upside price target is $11.00.

Central Petroleum (CTP) – Accumulate

CTP has been trading in a slow but consistent up trend over the past two years which is still technically intact.

The current secondary correction retraced to its dynamic support from its long term up trend line crossing at $0.14 where buying interest is likely to arise.

The price is close to its multiple static support of $0.125 which appears solid and is likely to holds once again. The only ingredient needed is an improvement in momentum, but we think this is on the cards. We see the proximity to static and dynamic support and the oversold momentum readings as an opportunity to accumulate the stock around current price levels. The initial upside price target is $0.18.

Link Administration Holdings (LNK) – Double Blessed Buy

LNK has been trading in a primary down trend since February 2018 which is still technically intact.>

The down swing from the May 2019 high has lost momentum and the price has been in a recovery mode over the past five months.

The current price is close to support of $5.46 from where the stock is likely to bounce. The RSI indicator has turned higher from oversold territory also supporting this view. The first potential upside price target is $6.00, followed by $6.50 over the medium term.

Western Areas (WSA) – Double Blessed Buy

The down trend from the April 2018 high has lost momentum and the price has been trading sideways throughout January 2019 and August 2019 building a large base.

In September 2019 a strong and decisive breakout above key resistance of $2.56 occurred confirming that a new secondary up trend is now underway.

The recent pull back retraced close to its breakout point of $2.56 where strong buying interest is likely to arise. The RSI and the MACD indicators have turned higher from oversold territory suggesting that the price is likely to rise in the coming months. The initial upside price target is $3.30.

Woodside Petroleum (WPL) – Target reached

In our last update on September 20, 2019 we discussed the likelihood of the price being in the process of building a small base and recommended clients buy the stock at $31.00.

A strong rally has unfolded over the past few months and our initial upside price target of $34.00 has now been reached.

Although, the weekly momentum indicators are approaching overbought territory, the long term chart remains constructive and we see a good probability of the secondary up trend extending further. The next potential upside price target is $36.00.

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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