Technical Analysis: 10 June 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
10 June 2019, 12:50 PM

Australian Foundation (AFI) – tracking well

AFI has been trading sideways over the past two years, fluctuating between $5.79 and $6.44. The rally from the May 2019 low has breached the gap resistance of $6.15 suggesting that the rally is likely to continue and fill the gap from the February 2019 high. This suggests that the current rally is likely to extend to $6.34 where selling pressure is likely to start building up.

Djerriwarrh (DJW) – building a base 

DJW has been trading in a down trend since August 2015 which is still technically intact. The latest down swing has retraced close to its key support of $3.02 which appears solid and is likely to hold. A large bullish divergence between the price and the weekly RSI indicator has formed on the 10-year chart suggesting that the stock might be at a turning point. A break above key resistance of $3.40 will confirm that a secondary bottom is in place and trigger higher prices in the month(s) ahead.

The potential upside price target is in the range between $3.50 and $3.55.

Coronado Global Resources (CRN) – double blessed buy

CRN has been trading sideways since listing, fluctuating between $2.46 and $3.44. The higher lows forming on the chart are an encouraging sign and show that buying interest is building up. The RSI indicator is now firmly in the bull market range suggesting that a subsequent break above resistance of $3.44 is likely. The stochastic indicator has turned up from oversold territory suggesting that the price is likely to bounce in the short term.

The first upside price target is $3.40. Once resistance of $3.44 is cleared the price is likely to rise fairly quickly to $4.00.

Link Administration (LNK) – double blessed buy 

In our last update on March 7, 2019 we discussed the overbought nature of the stock and the likelihood of resistance of $8.00 to exert selling pressure. The rally lost momentum over the past two months and the price traded sideways. After a disappointing update in late May 2019 the price gapped down and entered unchartered territory. The momentum indicators have reached strongly oversold territory suggesting that the price is likely to bounce in the short term. The selling pressure has eased over the past week and we are now comfortable opening a long position.

The initial upside price target is $6.00. Over the medium term, a rally to $6.50 is likely to unfold.

Genex Power (GNX) – buy around $0.25 

GNX has been trading in a down trend since December 2017 which is still technically intact. A large bullish divergence between the price and the RSI indicator has formed on the daily chart suggesting that the price might be at a turning point. The long term down trend line has been broken upwards recently showing that momentum is improving. Based on the breakout we see a good probability of the price rebounding to $0.30. 

We would be looking to open long positions around $0.25.

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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