Technical Analysis: 16 April 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
16 April 2020, 12:50 PM

BHP Billiton (BHP) – Approaching resistance

After breaking below a number of support levels and posting a low of $24.05 on March 13, 2020 the price experienced a strong rebound.

The current rally has rebounded close to its previous key support level of $34.42 where initial selling pressure is likely to arise. The RSI indicator is approaching its bear market resistance of 60% suggesting that the short term upside from here is likely to be limited. Given the proximity to resistance and the overbought momentum levels, we are of the view that the price is likely to pull back soon.

The potential short term share price weakness would provide an opportunity to accumulate the stock.

APA Group (APA) – At resistance

APA has been trading sideways over the past two years, fluctuating between $7.86 and $11.85.

The rally from the March 17, 2020 low of $8.06 rebounded close to its resistance of $11.85 where initial selling pressure is likely to arise. The RSI and the stochastic indicators have reached overbought territory suggesting that the price is vulnerable to a pull back in the short term.

Given the proximity to key resistance and the overbought momentum levels, we are of the view that the near term upside from here is likely to be limited.

Woodside Petroleum (WPL) – Buy on weakness

WPL experienced a severe selloff from a high of $36.28 on January 6, 2020 to a low of $14.94 on March 23, 2020.

A strong rebound to unwind the oversold momentum conditions took place over the past three weeks, with the current price action trading close to its resistance of $23.61, where selling pressure is likely to be encountered in the short term. The RSI indicator has approached its bear market resistance of 60% suggesting that the price is likely to pull back in the short term.

We see such potential short term share price weakness to $15.00 - $16.00 as an opportunity to accumulate the stock.

 Ansell (ANN) – Close to resistance

ANN has been trading sideways over the past two years, fluctuating between $20.16 and $33.40.

The price rallied strongly over the past three weeks and is currently trading close to its key resistance of $33.40 where selling pressure is likely to arise. The up swing has lost momentum over the past week with the price fluctuating in a narrow range between $28.61 and $30.63. The momentum indicators have approached oversold territory suggesting that the short term upside from here is likely to be limited. Given the proximity to key resistance and the overbought momentum levels, we are of the view that the price is vulnerable to a pull back in the short term.

Over the medium term, the stock is likely to continue to trade within the boundaries of its current trading range, therefore we see the current share price strength as an opportunity to lighten positions.

Goodman Group (GMG) – At resistance

After posting a high of $16.77 on February 14, 2020 GMG experienced a sharp selloff and has declined to a low of $9.61 on March 19, 2020.

A strong corrective rally to unwind the oversold momentum conditions took place over the past three weeks with the current price action is testing its previous support of $13.30, which is likely to act as a resistance in the short term. The stochastic indicator has reached overbought territory and the RSI indicator is approaching its bear market resistance. Both indicators suggest that the price is likely to pull back in the short term.

Given the proximity to key resistance and the overbought momentum readings, we see the current share price strength as an opportunity to lighten positions.

More information

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Disclaimer: Analyst may own shares. 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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