Technical Analysis: 23 April 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
23 April 2020, 1:00 PM

Freedom Food (FNP) – At support

FNP has been trading sideways over the past year, fluctuating between $3.90 and $6.00.

The current short term down swing has retraced close to its key support where initial buying interest is likely to arise. The momentum indicators are approaching oversold territory suggesting that the price is likely to bounce soon.

Given the proximity to key support and the oversold momentum conditions, we are comfortable to accumulate the stock around current price levels.

Dexus (DXS) – Close to support

After peaking up at $13.51 on February 21, 2020 DXS experienced a sharp selloff, declining to a low of $8.03 on March 23, 2020. The selling pressure subsided over the past month and the price action has been trading in a narrow range between $8.03 and $10.01.

The current short term down swing is approaching its intermediary key support of $8.03, where initial buying interest is likely to arise. The momentum indicators are approaching oversold territory suggesting that the price is likely to bounce soon. 

The current share price weakness presents an opportunity for active traders to accumulate the stock.

Macquarie Group (MQG) – Approaching resistance

After peaking at $152.35 on February 20, 2020 the stock experienced a sharp selloff, declining to a low of $70.45 on March 23, 2020. A strong rebound unfolded over the past month with the current price action approaching its previous key support of $114.35 where initial selling pressure is likely to arise.

While the current rally is still in progress, we are of the view that the current volatility is likely to subside soon, which means that the sharp moves up and down, are likely to ease and the price could enter a new phase of consolidation.

We see the potential further strength as an opportunity for active traders to lighten positions.

AP Eagers (APE) - Oversold

After peaking at $14.49 on September 25, 2019 the stock entered a bear phase and has declined to a low of $2.50 on March 23, 2020. The decline was arrested not far from a key support level of $1.84, which could be seen on the 20 years monthly chart, which appears solid and is likely to hold.

The weekly and monthly momentum indicators are in oversold territory, suggesting that the stock is likely to be in the process of establishing an important intermediate and potentially primary support. While the momentum indicators remain in a poor condition in all time frames, at current prices the stock is grossly oversold. Any further short-term share price weakness would provide an opportunity for proactive traders to establish a small long position.

Once we see the first tentative signs of a primary bottom being in the making, we would be more comfortable to upgrade the stock to a buy.

CSL Ltd (CSL) – Approaching resistance

CSL has been trading in a strong up trend since November 2018, which is still technically intact. The current short-term up swing is still in progress, however it is approaching its all time high of $342.75 where initial selling pressure may arise. The weekly and monthly momentum indicators are in overbought territory, suggesting that the current rally could take a breather soon.

While the stock outperformed the broader market of late and we still like it over the long term, such elevated price and momentum levels warrant some caution in the near term.

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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