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Technical Analysis: 17 January 2019

Violeta Todorova

Wesfarmers (WES) – building a base

The decline from the August 2018 high has lost momentum over the past month and the price has been trading sideways, fluctuating between $30.40 and $33.06. The higher lows on the daily chart are an encouraging sign and show that buying support is building up. While the momentum conditions remain weak at this point suggesting that the price may continue to trade sideways in the short term, over the medium term, the stock is likely to extend gains to $34.00.

We would be looking to accumulate around $31.00 - $31.50.

AGL Energy (AGL) – overbought

AGL has been trading in a down trend over the past two years which remains technically intact. The current short term up swing is approaching a band of resistance between $22.28 and $23.30 where initial selling pressure is likely to arise. The RSI and the MACD indicators have reached overbought territory suggesting that the stock is vulnerable to a short term pull back.

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

Paradigm Biopharmaceutical (PAR) – building a small base

The decline from the December 2018 high of $2.15 has lost momentum over the past two weeks and the price has been trading sideways, building a small base between $0.92 and $1.09. The MACD indicator has reached oversold territory suggesting that the price is likely to bounce soon.

The initial upside price target is $1.10 however this level could be exceeded.

Sonic Healthcare (SHL) – building a base

The down trend from the August 2018 high of $27.00 has lost momentum over the past two months and the price has been trading sideways, fluctuating between $21.26 and $23.52. While the momentum indicators are still weak at this point, we note that a bullish divergence between the price and the RSI indicator has formed on the daily chart, which suggests that support of $21.26 is solid and the price is likely to rebound.

The initial upside price target is $23.50, however the price may overshoot.

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.