Technical analysis: 9 June 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
09 June 2020, 4:00 PM

Afterpay Touch (APT) - Overbought

After bottoming at $8.01 on 23rd of March 2020 the stock rallied strongly, posting a fresh all-time high of $53.81 last week (+571% from through to its recent peak). The daily and weekly RSI and MACD indicators have reached overbought territory, suggesting that the near term upside from here is likely to be limited and that the price is vulnerable to a pull back in the short term.

Although, we continue to like the stock over the long term, given the overbought weekly and daily momentum readings, we see the current share price strength as an opportunity to lighten positions.

Aust Securities Exchange (ASX) – At resistance

After bottoming at $63.02 on the 13th of March 2020 the stock rallied strongly and the current secondary up trend remains intact. The current price action is re-testing its August 2019 high of $89.67 where initial resistance is likely to arise. The daily RSI and MACD indicators have reached overbought territory suggesting that the price is vulnerable to a pull back in the short term. The weekly momentum indicators have approached its overbought zone too, showing that the rally is likely to take a breather.

While subsequently this level of resistance could be broken, we see the short term upside from here as limited.

Domino’s Pizza (DMP) – At resistance

After bottoming at $49.66 on the 19th of March 2020 the price rallied strongly and posted a high of $66.67 last Thursday, surpassing its February high. While at this point there is no sign the secondary rally is reversing course, we note that the RSI and the MACD indicators have reached overbought territory on the daily chart, which points to a likely pull back in the coming weeks. The weekly RSI and stochastic indicators also reached overbought territory, both suggesting that the rally is likely to take a breather.

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

TPG Telecom (TPM) - Accumulate

In our last update on the 25th of May 2020 we discussed the overbought nature of the stock and the likelihood of the price declining in the short term. The stock pulled back over the past week with the price retracing close to its medium term up trend line. The stochastic indicator has reached oversold territory suggesting that the stock is likely to bounce in the near term.

Given the proximity to dynamic support and the oversold stochastic readings, we are comfortable to start accumulating around current price levels. The initial upside price target is $8.60.

Sydney Airport (SYD) – First target reached

In our last update on 21st of May 2020 we discussed the likelihood of the price trading higher in the near term and recommended clients buy the stock at $5.66. A consistent rally has unfolded over the past few weeks and our initial upside price target of $6.30 has now been reached. Friday’s price action broke above resistance of $6.35 and has confirmed the bullish ascending triangle pattern.

Our medium term upside price target of $7.00 appears to be within reach and we see a possibility of being exceeded over time.

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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