Technical Analysis: 20 February 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
20 February 2020, 11:22 AM

Emeco Holdings (EHL) – Building a base

The down trend from the October 2018 high has lost momentum over the past eight months and the price has been trading sideways, fluctuating between $1.61 and $2.43. The up swing from the November 2019 low extended gains and Wednesday’s price action rebounded to its key resistance of $2.43. While the daily RSI indicator has reached overbought territory, which points to a possible short term pull back, we note an improvement in the weekly momentum conditions, as the RSI completed a bottom reversal pattern. This is a very encouraging sign and suggests that the price might be at a turning point. Given the improvement in the weekly RSI readings we are of the view that a subsequent break above resistance of $2.43 is likely. The potential medium term upside price target is $2.80.

AMP Ltd (AMP) – At a turning point

AMP has been trading in a strong down trend since March 2018 which started showing the first signs that the price might be reversing direction. A second higher high was posted on Wednesday which is certainly an encouraging sign. A large bullish divergence between the price and the weekly RSI indicator has formed throughout 2019, showing that momentum is improving. The down trend line on the weekly RSI indicator from the March 2015 high has been broken upwards and the monthly RSI completed a clear bottom reversal pattern. All these developments are bullish and point to higher prices over the medium term. The initial upside price target is $2.40. Any short term share price weakness would provide an opportunity to accumulate the stock.

Beach Energy (BPT) - Accumulate

TBPT has been trading in an up trend over the past two years which is still technically intact. During the current pull back the price declined from a high of $2.91 to a low of $2.05, pushing the daily and weekly RSI indicator into oversold territory. While at this point there is no clear sign the correction is complete, we see a good probability of the price bouncing in the short term. The potential upside price target is $2.40.

Tabcorp Holdings (TAH) – Approaching key support

TAH has been trading sideways over the past two years, fluctuating between $4.09 and $4.99. The current secondary decline is approaching a band of support between $4.09 and $4.18, where initial buying interest is likely to arise. The weekly and daily momentum indicators have reached oversold territory suggesting that the current decline is likely to be arrested soon. While we rate the stock as a hold over the long term, we see a good opportunity for active traders to accumulate around $4.10.

Corporate Travel Management (CTD) – At Fibonacci support

CTD has been trading in a down trend since September 2018 which is still technically intact. On Wednesday, the down swing from the January 2020 high has retraced to its 61.80% Fibonacci retracement ratio crossing at $13.50 where initial support is likely to hold. The weekly and daily momentum indicators have reached oversold territory and we note a triple bullish divergence between the price and the RSI indicator on the weekly chart. This suggests that the price is likely to bounce in the short term. The potential upside price target is $18.00.

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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