Technical analysis: 30 July 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
30 July 2020, 10:34 AM

Nick Scali (NCK) – Bullish breakout

Nick Scali (ASX:NCK) has been trading in a strong secondary up trend since March 2020 which is still technically intact. The up-trend took a breather and has been trading sideways over the past month, fluctuating between $6.30 and $7.15.

Wednesday’s price action decisively broke above its resistance, confirming a rectangle pattern.

The pattern has bullish implications and suggests that the secondary up trend is likely to continue.

The RSI indicator remains within the boundaries of its bull market range (40%-80%), supporting the positive outlook for the stock in the near term.

The initial upside price target based on the breakout is $8.00, however this level could be exceeded.

InvoCare (IVC) – Approaching support

InvoCare (ASX:IVC) has been trading in a down trend since December 2017 which is still technically intact.

The primary down trend has lost momentum over the past four months and the price has been trading sideways, fluctuating between $9.07 and $12.12.

The current down swing has approached a band of support between $9.07 and $9.72 where initial buying interest is likely to arise.

While the price may stabilize in the near term, the weekly and daily momentum conditions remain weak, which suggests that further consolidation is likely to be seen in the coming months.

The current share price weakness presents an opportunity for active traders to accumulate the stock with initial upside price target of $10.50.

Ingenia Group (INA) – Bullish breakout

Ingenia Group (ASX:INA) has been trading in a secondary up trend since March 202 which is still technically intact.

The up trend took a breather over the past month and the price has been trading sideways, fluctuating between $4.27 and $4.70.

Tuesday’s price action broke above resistance of $4.70, suggesting that higher prices are likely to unfold in the coming weeks.

The initial upside price target is in the range between $5.10 and $5.20. The RSI indicator remains firmly in the bull market range at this juncture in time, supporting the breakout and our positive view on the stock in the near term.

Origin Energy (ORG) – Buy on weakness

Origin Energy (ASX:ORG) has been trading in a primary down trend since September 2008 which is still technically intact.

The decline from the December 2019 high has retraced to its previous key support of $3.44 which appears solid and is likely to hold.

We are of the view that the stock is in the process of building a long-term bottom, which may take a few years to complete. Over the medium term, the price is likely to stabilize and trade sideways between $4.90 and $6.80.

In the short term, the rally from the March 2020 low has lost momentum over the past six weeks and the price has been trading sideways within the boundaries of a descending triangle pattern.

A break below $5.57 would confirm the pattern and trigger a decline to $4.90 in the short-term.

We see such potential short-term share price weakness as an opportunity to accumulate the stock.

Medibank Private (MPL) – Further weakness

The Medibank Private (ASX:MPL) rally from the March 2020 low has lost momentum over the past month and the price has been trading sideways, fluctuating within the boundaries of a small bearish descending triangle pattern.

Tuesday’s price action broke below minor support of $2.90 suggesting that further share price weakness is likely to be seen in the coming week(s).

The RSI indicator broke below its bull market support, suggesting that a deeper pull back from here is likely.

The initial downside price target is $2.74.

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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