Technical Analysis: 8 November 2019

About the author:

Violeta Todorova
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.

More information

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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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