Technical analysis: 23 July 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
23 July 2020, 12:00 PM

Baby Bunting Group (BBN) – Bullish breakout

The rally from the March 2020 low has lost momentum over the past two months and the price has been trading sideways, fluctuating between $2.90 and $3.45. Wednesday’s price action broke on a closing basis above resistance of $3.45 and has confirmed an imperfect rectangle pattern. The pattern has bullish prognosis and suggests that the secondary up trend is likely to continue its march higher.

The initial medium term upside price target based on the breakout is $3.90. The RSI indicator remains in the bull market range (above 40%) at this juncture in time and supports our positive view on the stock.

Beach Energy (BPT) – Ready for a breakout

The correction from the June 2020 high has lost momentum over the past month and the price has been trading sideways, fluctuating between $1.40 and $1.59, building a small base. The leading RSI indicator has completed a small bottom reversal pattern, showing that momentum is improving and suggesting that the price is likely to follow suit. A break above minor resistance of $1.59 is likely and will confirm that the correction is complete.

The initial upside price target based on the anticipated breakout is $1.80. Given the improvement in the momentum conditions, we are comfortable to buy the stock at current price levels, before an actual breakout has occurred.

Orocobre (ORE) – Lifting our target

In our last update on the 2nd of July 2020 we discussed the likelihood of the price trading higher in the short term and recommended clients buy the stock at $2.38. A strong rally has unfolded over the past three weeks and our upside price target of $2.90 has now been reached and greatly exceeded. The RSI indicator has reached overbought territory suggesting that the price is vulnerable to a pull back in the short term.

We continue to like the stock over the long term and we see such potential short term share price weakness as another opportunity to accumulate the stock. The next potential long term upside price target is $3.60.

Regis Resources (RRL) – Lifting our target

In our last update on the 27th of April 2020 we discussed several bullish setups emerging on the chart and the likelihood of the price trading higher in the coming months. A strong rally has unfolded over the past two months and our upside price target of $5.50 has now been reached and exceeded. The current short term up swing has broken decisively above resistance of $5.62 suggesting that higher prices are likely to unfold over the medium term.

The RSI indicator remains in the bull market range (above 40%) and supports our positive view on the stock. Therefore, we lift our price target to $6.40.

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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