Technical Analysis: 17 January 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
17 January 2020, 3:12 PM

Volpara (VHT) – Tracking well

In our last update on November 28, 2019 we discussed that support of $1.65 is likely to hold and recommended clients buy the stock.

The price action and the momentum indicators remain constructive on the daily and weekly charts, and we see good probability of the price trading higher in the coming months.

The first potential upside price target is $2.15, followed by $2.30 over the long term.

Nanosonics (NAN) – Overbought

NAN has been trading in an up trend over the past year which is still technically intact.

The up trend has lost momentum over the past few months and the price has been trading sideways, fluctuating between $5.95 and $7.60.

The momentum indicators are in the neutral market range, suggesting that further consolidation could be seen in the coming months.

The current short term rally rebounded close to its previous resistance of $7.60 where initial selling pressure is likely to arise.

The RSI and the stochastic indicators have reached overbought territory, pointing to a likely pull back in the short term. We see a potential retracement to $6.20 as a buying opportunity.

Acrow Formwork (ACF) – Ready to breakout

ACF has been trading in a down trend since September 2018 which appears ready to reverse direction.

An inverse head and shoulders pattern has formed on the daily chart showing that buying pressure is building up.

The leading RSI indicator has moved into the bull market range suggesting that an upward breakout is likely to take place soon.

A decisive break above resistance of $0.35 would confirm the bullish pattern and is likely to trigger a rally to $0.44.

South32 (S32) – Ready to breakout

S32 has been trading in a down trend since October 2018 which is still technically intact.

The down trend has lost momentum over the past four months and the price has been trading sideways within the boundaries of an imperfect bullish ascending triangle.

A decisive break above resistance of $2.84 would confirm the pattern which is likely to trigger a rally to $3.25.

We notice an improvement in the momentum conditions and we see an upward breakout as highly probable.

Orocobre (ORE) – Lifting our target

In our last update on November 29, 2019 we discussed the likelihood of the price building a base and recommended clients buy the stock in the range between $2.20 and $2.30.

A strong rally has unfolded over the past two weeks and our second upside price target of $3.30 has now been reached and exceeded.

While initial selling pressure is likely to be encountered around its previous resistance of $4.04, the long term chart remains constructive and we see higher price levels achievable in the months ahead.

Therefore, we lift our long term price target to $4.70.

Crude oil – Potential short term bounce

Crude oil has been trading sideways over the past nine months, fluctuating between US$50.52 and US$66.60.

The current pull back pushed the momentum indicators into oversold territory suggesting that the price could bounce in the short term.

The potential short term price target is in the range between US$63.00 and US$64.00.

Over the medium term, we favor further consolidation as the momentum indicators remain in the sideways market range.

Otto Energy (OEL) – Accumulate

OEL has been trading in a downward trajectory since March 2019 which is still technically intact.

The current short term down swing has retraced to its previous support of $0.033 where initial buying interest is likely to arise.

The stochastic indicator has reached oversold territory suggesting that the price could bounce in the short term.

The initial upside price target is $0.040, which is a key level to watch.

A break above this level would be the first sign the down trend is turning and could trigger further strength in the months ahead with a potential target of $0.045.

While at this point there is no sign that price has bottomed, given the oversold weekly momentum conditions and the proximity to support, we are comfortable to open a small long position.

We would be looking to add up, once we have a confirmation the trend has reversed.

Senex Energy (SXY) – Accumulate

SXY has been trading sideways over the past year, fluctuating between $0.26 and $0.42.

The pull back from the September 2019 high has lost momentum over the past month with the price posting higher lows on the daily chart, which shows that buying interest is building up.

The stochastic indicator has reached oversold levels suggesting that the price is likely to bounce soon.

The first potential upside price target is $0.37. Over the medium term, levels to 40.42 are achievable.

Karoon Energy (KAR) – Lifting our target again

In our update on November 8, 2019 we discussed the improvement in the momentum conditions and the likelihood of the price rising in the short term.

The price rose strongly over the past month and our second price target of $1.20 has now been reached and exceeded.

While the stock is overbought on a weekly and daily basis and a pull back could take place in the short term, we see a good probability of the rally extending further over the medium term.

The next potential upside price target is $1.55.

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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