Technical analysis: 6 July 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
06 July 2020, 9:00 AM

Collins Foods (CKF) – Approaching resistance

CKF has been trading in a secondary up trend since the 18th of March 2020 which is still technically intact. Last week’s price action gapped up strongly and rebounded close to a band of resistance between $9.95 and $10.80, where initial selling pressure is likely to arise.

The daily and weekly momentum indicators have approached overbought territory suggesting that the price is likely to pull back in the short term.

Given the proximity to a band of resistance and to overbought momentum levels, we are of the view that the short term upside from here is likely to be limited.

Cochlear (COH) – Improvement in momentum

The decline from the February 2020 high has lost momentum over the past three months and the price has been trading sideways, fluctuating between $154.60 and $207.76.

Friday’s price action broke above minor resistance of $198.70 and the RSI indicator broke for the first time since March above 60%, both showing that momentum is improving. A subsequent break above resistance of $207.76 is highly likely and could trigger a rally to $220.00 in the short term.

Over the medium term, higher price levels are achievable.

CSL Ltd (CSL) – Ready for a breakout

In our last update on the 25th of May 2020 we discussed the likelihood of the price declining in the short term and recommended clients buy the stock in the range between $270.00 - $275.00. The price declined to $275.50 on the 9th of June 2020 and provided a good opportunity to accumulate the stock.

The short term down trend line from the April high has been broken recently, showing that the correction is losing momentum. A higher low has formed on the daily chart and shows that buying interest is building up.

A break above minor resistance of $297.64 is likely and will confirm that a small bottom is in place. The first potential upside price target based on the anticipated breakout is $319.00.

Sonic Healthcare (SHL) – Approaching resistance

After bottoming at $1.45 on the 24th of March 2020 the price rallied strongly and is fast approaching a band of resistance between $3.56 and $3.69.

The daily MACD and RSI indicators have reached overbought territory suggesting that the price is vulnerable to a pull back in the short term.

The weekly RSI indicator is approaching overbought levels too, suggesting that the overhead band of resistance is likely to exert selling pressure.

Given the proximity to key resistance and the overbought daily weekly momentum conditions, we are of the view that the near term upside from here is likely to be limited.

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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