Technical Analysis: 1 February 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
01 February 2019, 9:05 AM

Bellamy's Australia (BAL) – bullish breakout

In our update on August 17, 2018 we discussed the likelihood of the price bouncing in the short term and recommended clients buy the stock at $9.71. While the price did bounce and our first price target of $12.50 was reached fairly quickly, the rally was not sustained and the price resumed its prior downward trajectory.

Over the past three months the down trend has clearly lost momentum and the price has been trading sideways, fluctuating between $7.31 and $8.56. Thursday's price action broke above its resistance of $8.56 suggesting that higher prices are likely to unfold in the months ahead. The first potential upside price target based on the breakout is $10.40. Over the medium term, levels to $12.00 appear easily achievable.

Our buy recommendation came a bit too early and at this point we are still holding our long positions.

Charter Hall Group (CHC) – overbought

CHC has been trading in a strong up trend since November 2016 which is still technically intact. The weekly and daily momentum indicators have reached overbought territory suggesting that the stock is vulnerable to a short term pull back. The potential downside price target is $7.70 however this level could be exceeded.

The current share price strength presents a good opportunity for active traders to trim positions.

Dexus (DXS) – overbought

DXS has been trading in a strong up trend since February 2018 which is still technically intact. The weekly and daily momentum indicators have reached overbought territory suggesting that the stock is vulnerable to a short term pull back. The initial downside price target is $11.00 however this level could be exceeded.

Over the long term, the price rebounded close to its all-time high of $12.51, which is likely to act as a strong resistance for this stock.

Inghams (ING) – short term weakness

ING has been trading in a strong up trend since listing in November 2016 which is still technically intact. The current up swing has reached an all-time high of $4.69 where initial selling pressure is likely to arise. The RSI and the MACD indicators have reached overbought territory suggesting that the short term upside from here is likely to be limited.

The last bar on the daily chart is an open/close reversal suggesting that the price is vulnerable to a pull back in the short term.

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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