Technical Analysis: 6 May 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
06 May 2019, 10:25 AM

PWR Holdings Limited (PWH) – deterioration in momentum

PWH has been trading in a strong up trend since August 2017 which is still technically intact. A large bearish divergence between the price and the RSI indicator has formed on the weekly chart showing that the long term up trend is losing momentum. A small descending triangle (a bearish formation) has formed on the daily chart suggesting that the price is vulnerable to a pull back in the short term. A break below minor support of $3.75 is likely and could trigger a fast sell off to $3.50.

Given the bearish setup on the charts, active clients may consider trimming positions.

Amcor (AMC) – overbought 

AMC has been trading in a strong up trend since October 2018 which is still technically intact. Friday's price action rebounded close to its all-time high of $16.78 and the weekly RSI and MACD indicators have reached overbought territory. A large bearish divergence between the price and the RSI indicator has formed on the daily chart showing that momentum is deteriorating.

Although at this point there is no reversal signal evident on the chart, given the proximity to key resistance and the overbought and deteriorating momentum conditions, we believe the near term upside from here is likely to be limited.

SEEK (SEK) – heading higher

The down trend from the September 2018 high has lost momentum over the past four months and the price has been trading sideways, fluctuating within the boundaries of a bullish ascending triangle. Last week's price action broke above resistance of $18.97 and has confirmed the pattern. The potential upside price target based on the breakout is $21.00.

A pull back in the short term would provide a good buying opportunity.

Orocobre (ORE) – lifting our target 

In our last update on April 28, 2019 we discussed that support of $3.19 is solid and the price is likely to bounce in the short term and recommended clients buy the stock. A strong bounce has unfolded over the past few days and our initial upside price target of $3.65 has now been reached.

The higher lows on the chart are an encouraging sign and we see a good probability of the price trading higher over the medium term. Therefore, we lift our price target to $4.50.

Superloop (SLC) – target reached

In our update on April 4, 2019 we discussed the improvement in the momentum conditions, the likelihood of an upward breakout and recommended clients buy the stock while it was within the trading range. A strong rally has unfolded over the past month and our price target of $2.00 has almost been reached (the price posted a high of $1.95 on Friday). 

While the stock still appears technically cheap on a long term basis, SLC received a $1.95 non-binding indicative proposal, therefore we will stop providing technical updates.

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.

  • Print this page
  • Copy Link