Technical analysis: 27 August 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
27 August 2020, 2:58 PM

Bingo Industries (BIN) – Target reached

In our last update on the 14th of August 2020 we highlighted number of bullish developments on the daily chart and discussed that a break above resistance of $2.07 appears imminent.

We were expecting a bounce in the short-term and rated the stock a high conviction buy while it was still within the boundaries of the small ascending triangle.

A strong rally has unfolded over the past three days and our upside price target of $2.40 has now been reached.

The RSI and the stochastic indicators have reached overbought territory suggesting that the current short-term up swing is likely to take a breather and the price is vulnerable to a pull back.

Therefore, we recommend active traders take some profits.

Acrow Formwork (ACF) – Target reached

In our last update on the 17th of August 2020 we discussed that the RSI indicator is firmly in the bull market range and highlighted that the price is likely to trade higher in the coming weeks.

The price bounced strongly over the past week and our initial upside price target of $0.36 has now been reached.

The current price action is close to its key resistance of $0.38 where initial selling pressure is likely to arise.

The RSI indicator has reached overbought territory suggesting that the rally from the March 2020 low is likely to take a breather.

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

The recent break above the long-term down trend line and the higher lows on the daily chart is an encouraging sign and show that buying interest is building up and the stock is approaching a turning point.

A subsequent break above key resistance of $0.38 is required to confirm that the stock is no longer in a downward cycle and is the key level to monitor moving forward.

Treasury Wine Estates (TWE) - Accumulate

In our last update on the 14th of August 2020 we discussed the proximity to key resistance of $13.80 and the likelihood of the price declining in the short-term and we recommended active traders take some profits.

The price pulled back to its previous support of $9.35 and is close to its key support of $8.40, where buying interest is likely to arise.

The short-term down swing has lost momentum over the past week and the price has been trading sideways building a small base.

A break above minor resistance of $10.09 is likely and would confirm that a short-term bottom is in place.

The potential upside price target is $11.00.

Vocus Communications (VOC) – At resistance

VOC has been trading in an upward trajectory since March 2020 which is still technically intact.

The current short-term up swing has rebounded close to a band of resistance between $3.66 and $3.83 where initial selling pressure is likely to arise.

The RSI and the stochastic indicators have reached overbought territory suggesting that the price is likely to pull back soon.

Given the proximity to a band of resistance and the overbought momentum conditions we are of the view that the near-term upside from here is likely to be limited.

G8 Education (GEM) – Approaching resistance

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

The current short-term up swing is approaching its resistance of $1.20 where initial selling pressure is likely to arise.

The daily RSI indicator has reached overbought territory suggesting that the short-term rally might be arrested soon.

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

Over the medium-term, our view on the stock is neutral and we favour further sideways trading between $0.75 and $1.20.

More information

Morgans clients can login to view all recent technical analysis on companies we cover by browsing the research section and filtering by 'technical analysis' in the Market Updates section. If you are interested in finding out more, please contact your nearest Morgans office.

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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