Technical Analysis: 13 February 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
13 February 2020, 3:41 PM

Orora (ORA) – Bearish breakout

The primary down trend from the August 2018 high has lost momentum over the past six months and the price has been trading sideways, fluctuating between $2.60 and $3.37.

The secondary rally from the August 2019 low has lost momentum and over the past two months the price has been trading in a narrow range between $3.12 and $3.37.

Wednesday’s price action broke below its minor support of $3.12 and its key support of $2.96.

This suggests that over the medium term the price is likely to trade lower and the gap created in October 2019 is likely to be filled, which gives us a downside price target of $2.76.

Oil Search (OSH) – Approaching key support

OSH has been trading in a down trend since October 2018 which is still technically intact. The current short term down swing has retraced to its previous key support of $6.15 (which could be seen on the weekly chart) where initial buying interest is likely to arise.

The daily and weekly momentum indicators have reached oversold territory suggesting that the price could bounce in the short term.

The potential upside price target is $6.86 where selling pressure is likely to arise.

Over the long term, at this juncture of time there is no signal the down trend is reversing direction and investors should keep an eye on key support of $6.15, as a break below it could trigger a decline to $5.60.

Novonix (NVX) – Approaching key support

The decline from the March 2018 high has lost momentum over the past year and the price has been trading sideways, fluctuating between $0.36 and $0.80.

The current short term down swing has approached a band of support between $0.36 and $0.40 where initial buying interest is likely to arise.

The RSI indicator has reached oversold territory suggesting that the price is likely to bounce soon.

Given the proximity to a band of support and the oversold momentum readings, we are comfortable to start accumulating the stock around current price levels. The initial upside price target is $0.46.

REA Group (REA) – Overbought and diverging

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

Last week’s price action posted an all-time high of $117.30 pushing the weekly and daily momentum indicators into overbought territory.

While at this point there is no reversal signal evident on the chart, we note a bearish divergence between the price and the RSI indicator forming on the weekly chart.

This is the first signal that momentum is weakening.

Investors should keep an eye on key dynamic and static support of $108.00 as a break below it could trigger a fast decline to $99.00.

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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