Technical Analysis: 8 November 2019
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Senior Technical Analyst
- Date posted:
- 11 November 2019, 1:20 PM
Megaport Limited (MP1) – In consolidation
- MP1 has been trading in a strong up trend over the past year, which has clearly lost momentum over the past month.
- The recent price action broke below number of support levels and its medium term up trend line showing the up trend is taking a breather.
- The daily RSI indicator broke below its bull market range support, while the weekly RSI completed a top reversal pattern suggesting that a secondary correction is underway and is not complete yet.
- Given the daily oversold momentum readings, we see a good probability of the price bouncing in the short term which is likely to be followed by another leg down. The next potential support is at $6.80, which is a 50.00% Fibonacci retracement ratio.
Amcor (AMC) – A bottom is in place
- AMC has been trading in a down trend since July 2019 which now appears to be reversing direction.
- The weekly RSI indicator completed a bottom reversal pattern from oversold territory and the daily RSI broke above its bear market resistance range.
- The price broke above number of resistance levels suggesting that a secondary bottom is likely to be in place. The first potential upside price target is $14.90 followed by $15.40.
REA Group (REA) – Bearish breakout
- REA has been trading in a strong up trend since March 2019 which appears to be reversing direction.
- Friday’s price action broke below support of $104.41 suggesting that a secondary correction is likely to unfold in the coming weeks.
- The potential downside price target based on the breakout is $98, however this level could be exceeded.
Pro Medicus (PME) - Accumulate
- PME has been trading in a correction mode since September 2019 which is still technically intact.
- The current price action retraced to its key support of $23.38 where initial buying interest is likely to arise.
- The weekly and daily RSI readings approached oversold territory suggesting that the price is likely to bounce soon. The initial upside price target is $28.00, however this level could be exceeded.
- While at this point, there is no clear sign the correction is complete, given the proximity to support and the oversold momentum levels, we are comfortable to open a small long position.
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