Technical analysis: 9 October 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
09 October 2020, 3:00 PM

ResMed Inc (RMD) – Double Blessed Buy

ResMed (ASX:RMD) has been trading in a strong primary up trend over the past two years which is still technically intact. After reaching an all-time high of $29.30 in July 2020 a correction to unwind the overbought momentum conditions took place.

The price retraced to its previous support of $22.89 where buying interest has been building up over the past few weeks.

The MACD indicator has crossed from oversold territory suggesting that the price is likely to trade higher in the coming month.

The RSI indicator completed a bottom reversal pattern also pointing to a likely rally from here.

A break above minor resistance of $24.44 would confirm a small bottom reversal pattern is in place and would signal that the correction is likely to be over.

The first potential upside price target is $26.00. Over the medium-term, levels to $28.50 are achievable.

Any short-term share price weakness would provide a great opportunity to buy the stock.

CSL Ltd (CSL) – Ready to take-off

The primary up trend has lost momentum over the past eight months and the price has been trading sideways within the boundaries of a symmetrical triangle.

The pattern shows indecision among market participants and a breakout could occur in either direction.

We note that the RSI indicator remains in its bull market range showing that momentum is still strong.

This gives us an indication that an upward breakout has a higher probability. A break above resistance of $299.45 is likely and could trigger a rally to $315.00.

Over the medium-term, levels to $330.00 are achievable.

Cochlear (COH) – Heading higher

The rebound from the March 2020 low has lost momentum over the past six months and the price has been trading sideways within the boundaries of an ascending triangle pattern.

The first upward breakout in August has failed but the RSI indicator remains in ascending trajectory showing that the momentum is still strong.

The price remains above its medium-term up trend line showing that buying interest is growing.

Therefore, we see a good probability of the price breaking above resistance of $207.76 which is likely to trigger a rally to $220.00.

Over the medium-term, we see levels to $230.00 as easily achievable.

IRESS (IRE) – High conviction buy

The decline from the February 2020 high has lost momentum over the past six months and the price has been trading sideways, fluctuating between $9.43 and $12.01.

The current short-term down swing has retraced to its support where a small bottom has been forming over the past week.

The RSI indicator has completed a bottom reversal pattern from oversold territory showing that momentum is improving.

A break above minor resistance of $9.83 would suggest that the correction is complete and is likely to trigger a rally to $10.50 in the short-term.

Over the medium-term, levels to $12.00 are achievable.

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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