Technical Analysis: 18 October 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
18 October 2019, 5:06 PM

Splitit (SPT) – Text book inverse head and shoulders

SPT has been trading in a down trend since March 2019 which has now clearly reversed direction.

A text book inverse head and shoulders pattern has formed on the daily chart throughout July 2019 and October 2019.

The price broke above the neckline on Tuesday and has confirmed the pattern.

The first upside price target based on the breakout is $1.00 followed by $1.25 over the medium term. Wednesday’s price action formed a bearish shooting star candle which suggests that the price is likely to pull back in the short term.

The RSI and the stochastic indicators have reached overbought territory also pointing to a short term weakness.

We see a very good probability of the price retracing to its neckline crossing at $0.71, where we would be looking to open long positions.

Afterpay Touch (APT) – Short term weakness

APT has been trading in a strong up trend since November 2018 which is still technically intact.

A triple bearish divergence between the price and the RSI indicator has formed on the daily chart suggesting that the price is vulnerable to a deeper pull back.

The leading RSI indicator completed a top reversal pattern on Wednesday showing that momentum is deteriorating and indicating that lower prices are likely to unfold in the week(s) ahead.

A break below minor support of $33.43 is likely and will confirm a small double top pattern.

The potential downside price target is $29.00.

Superloop (SLC) – Bullish breakout

SLC has been trading in a primary down trend since September 2016 which is still technically intact.

The secondary down trend from the May 2019 high has lost momentum over the past two months and the price has been trading in an upward trajectory.

Tuesday’s price action broke on a closing basis above minor resistance of $1.07 confirming a bullish inverse head and shoulders pattern.

The potential upside price target based on the breakout is $1.35.

Any short term weakness in the days ahead would provide a great buying opportunity.

G8 Education (GEM) – Building a base

GEM has been trading in a primary down trend since September 2014 which is still technically intact.

The decline from the February 2019 high retraced close to its key support of $1.88 which appears strong and is likely to hold.

Higher lows appear to be building on the daily chart suggesting that buying interest is building up.

A break above $2.62, which is a static and dynamic resistance for the stock would confirm a bottom reversal pattern and is likely to trigger higher prices in the near term.

The initial upside price target is $2.90.

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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