Technical Analysis: 3 January 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
03 January 2019, 9:42 AM

Lovisa (LOV) – tactical buy

Lovisa has completed and confirmed a bearish double top pattern in September 2018 and has been trading in a down trend since then. The weekly RSI indicator has reached oversold territory and a bullish divergence between the price and the RSI has formed on the daily chart, suggesting that buying interest is likely to emerge soon.

While at this point there is no sign that the medium term down trend is over, given the oversold and divergent momentum conditions, we see a good probability of the price bouncing in the short term. Therefore, we open a tactical buy at current price levels with an initial upside price target of $7.00.

OceanaGold (OGC) – target reached

In our last update on September 21, 2018 we discussed the likelihood of the price breaking above resistance of $4.23 based on the constructive momentum conditions. A strong rally has unfolded over the past three weeks and our initial upside price target of $4.60 has been exceeded as expected. Wednesday’s price action reached an intra-day high and has pushed the RSI and the MACD indicators into strongly overbought territory.

While at this point there is no sign that the medium term up trend is over, we see the stock as being vulnerable to a short term pull back.

Regis Resources (RRL) – closing our tactical buy

In our last update on September 21, 2018 we discussed the likelihood of the price trading higher in the near term and opened a tactical buy at $4.11. The price traded higher over the past three months and our medium term price target of $4.80 has now been reached and exceeded.

While at this point there is no sign that the medium term up trend is over and the price could extend gains in the months ahead, we note that the RSI and the MACD indicators are in overbought territory, which makes the stock vulnerable to a short term pull back. Therefore, we close our tactical buy.

Atlas Arteria (ALX) – lowering our downside target

In our last update on October 25, 2018 we discussed the bearish implications from the leading RSI indicator breaking below its key support and highlighted that the stock is likely to trade lower in the near term. The stock traded within the boundaries of a bearish descending triangle over the past few months with recent price action breaking below key support and confirming the pattern.

Our initial downside price target of $6.30 has been reached and given the confirmation that a medium term top is now in place we lower our target to $5.70.

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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