Technical Analysis: 24 December 2020
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Senior Technical Analyst
- Date posted:
- 24 December 2020, 10:00 AM
The A2 Milk Company (A2M) – At support
After reaching an all-time high of $20.05 in June 2020 the up trend has lost momentum and the price has been trading in a downward trajectory since then.
The current price action has retraced close to a band of support between $8.14 and $9.19 which appears solid and where strong buying interest is likely to arise.
The weekly RSI and MACD indicators have reached strongly oversold territory suggesting that the price is likely to bounce in the coming month(s).
The daily momentum conditions are oversold as well, however we note a significant deterioration over the past few months.
This suggests that at best the stock is likely to trade sideways in the next three to six months.
Given the proximity to a band of key support and the oversold weekly and daily conditions, we see the current price levels as attractive to accumulate.
The potential medium-term upside price target is $13.00, where initial resistance is likely to arise, as this level has been a previous multiple support.
Zip Co (Z1P) – At support
After posting a record high of $10.64 in August 2020 the up trend has lost momentum and the price has been trading in a downward trajectory.
The current price action has retraced to a band of support between $4.75 and $5.03 where initial buying interest is likely to arise.
While at this point there is no sign the secondary down trend is reversing course and the momentum conditions remain weak, we note that over the past two months the down trend makes only marginally lower lows, which suggests that buying interest started building up.
Given the proximity to support and the oversold momentum conditions, we are comfortable to start accumulating the stock around current price levels. The first potential upside price target is $5.80 followed by $6.80.
Cochlear (COH) - Oversold
COH has been trading sideways over the past two years, fluctuating between $154.60 and $254.40.
The current sharp pull back has retraced close to a band of support between $185.35 and $187.03 where initial buying interest is likely to arise.
The RSI and the MACD indicators have reached oversold levels suggesting that the current decline is likely to be arrested soon.
While at this point there is no sign the correction is reversing course, given the proximity to support and the oversold momentum conditions, we are comfortable to start accumulating the stock around current price levels.
The initial upside price target is $210.00
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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.