Technical Analysis: 15 November 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
15 November 2019, 11:10 AM

Viva Energy REIT (VVR) – Accumulate

Viva Energy (VVR) has been trading in a primary up trend since February 2018 which now appears to be undergoing a secondary correction.

The current down swing has pushed the daily momentum indicators into strongly oversold territory, which suggests that the price is likely to bounce in the short term.

The current price action is close to support of $2.56 which appears solid and is likely to hold.

The initial upside price target is $2.80. The recent deterioration in momentum conditions suggest that over the medium term the stock is likely to take a breather and trade sideways, potentially between $2.50 and $2.90.

Dexus (DXS) – Improvement in momentum

Dexus (DXS) has been trading in a correction mode since July 2019, fluctuating within the boundaries of a down trend channel which is still technically intact.

While at this point there is no sign the correction is complete, we note a triple bullish divergence between the price and the RSI indicator, which shows that momentum is improving.

The weekly RSI indicator retraced to its bull market support of 36% suggesting that a stronger rebound might be on the cards.

The price is close to its previous resistance of $10.90 which is likely to act as a strong support.

AusNet Services (AST) – Bearish breakout

AusNet (AST) has been trading sideways over the past two years, fluctuating between $1.50 and $2.00.

Thursday’s price action broke below its short term up trend line, suggesting that the rally from the September 2019 low is reversing course and the price is likely to drop in the short term.

The daily RSI indicator completed a top reversal pattern suggesting that lower prices are likely to unfold in the week(s) ahead.

The initial downside price target is $1.75, however lower prices are feasible over the medium term.

Nanosonics (NAN) – Unstoppable

Nanosonics (NAN) has been trading in a strong up trend since December 2018 which is still technically intact.

Thursday’s price action broke above resistance of $7.16 and posted a fresh record high of $7.47.

The breakout has bullish implications over the medium term and points to higher prices in the month(s) ahead.

The potential medium term upside price target is $8.00.

Although the stock is overbought on a weekly and daily basis, we are comfortable to hold long positions.

Australian Foundation (AFI) – Target reached

In our last update on June 7, 2019 we discussed the bullish implications from the breached gap resistance and the likelihood of the rally extending further.

The price has been trading consistently higher over the past five months, greatly exceeding our initial upside price target of $6.34, generating a new breakout and posting a fresh record high of $6.82 on Thursday.

The new medium term upside price target based on the recent breakout is $7.00.

The stock traditionally peaks around February and August and while at this point there is no reversal signal evident on the chart and the price could continue its march higher, we note the overbought weekly and daily readings on the RSI and the stochastic indicators.

Taking all these into account, we are of the view that the rally could soon stall around $7.00 and take a breather in the coming months.

Djerriwarrh (DJW) – Target reached

In our last update on June 7, 2019 we discussed the positive implications from the triple bullish divergence between the price and the RSI indicator on the weekly chart.

We highlighted that the stock is likely to be at a turning point and in the process of building a base and likely to trade higher in the secondary time frame.

A strong rally has unfolded over the past five months and our initial upside price target of $3.55 has now been reached.

While the stock is facing an overhead resistance between $3.68 and $3.76, we note an improvement in the weekly momentum conditions, which suggests that eventually in the long run these levels will be surpassed.

We notice that the stock usually peaks up around January and July which indicates the current rally is likely to continue.

The key support of $3.02 proved to be solid as expected, the long term down trend line is now broken upwards and the weekly MACD has moved into the bull market range. All these suggests the stock is still inexpensive on a long term basis and has the potential to run higher into January.

Link Administration Holdings (LNK) – Bullish breakout

In our last update on June 7, 2019 we discussed the likelihood of the price trading higher over the medium term and recommended clients buy the stock.

While it was a wild ride since our recommendation came a bit too early, things are back on track.

Friday’s price action broke above minor resistance of $5.90 suggesting that the rally is likely to continue. Our price target remains unchanged at $6.50 where active traders may consider lightening positions.

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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