Technical Analysis: 10 January 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
10 January 2019, 2:00 PM

Fortescue Metals (FMG) – closing our tactical buy

In our last update on September 20, 2018 we discussed the oversold momentum conditions and the likelihood of the price rallying in the near term and recommended clients buy the stock at $3.79. A slow but consistent rally has unfolded over the past few months with our position being in the money most of the time. Our first price target of $4.20 has been reached in November and the current price is close to our medium term target of $4.80.

While we see an improvement in momentum conditions and the price could trade above $5.00 in the months ahead, the stock is oversold on a daily basis, therefore we close our tactical buy.

Treasury Wine Estate (TWE) – building a base

TWE has been trading in a correction mode since September 2018 which is still technically intact. The pull back has lost momentum over the past month and the price has been trading sideways, fluctuating between $13.38 and $15.12.

Given the higher lows forming on the daily chart (a sign that buying pressure is building up) we are of the view that a break above resistance of $15.12 is likely. The potential upside price target based on the anticipated breakout is $16.50.

Crown Resorts (CWN) – building a base

CWN has been trading in a correction mode since August 2018 which is still technically intact. The pull back has lost momentum over the past month and the price has been trading sideways, fluctuating between $11.43 and $12.15

The stock is oversold on a weekly basis and we are of the view that a break above $12.15 is likely, which could trigger a rally to $12.80.

Pendal Group (PDL) – building a base

In our last update on December 6, 2018 we discussed the overbought momentum conditions and the likelihood of the price falling in the short term. A strong decline has unfolded over the past month as expected and our downside price target of $7.30 has now been reached.

The marginally lower low posted last week, the proximity to key support of $7.19 and the oversold weekly momentum conditions suggests that the down trend which started back in May 2017 is likely to take a breather. Therefore, we see a good probability of the price trading higher to $8.70 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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