Technical analysis: 24 September 2020

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
24 September 2020, 6:06 PM

Nufarm (NUF) – Double Blessed Buy

Nufarm (ASX:NUF) has been trading in a secondary down trend since October 2019 which is still technically intact.

The recent price action has retraced close to its key support of $3.60 which appears solid and is likely to hold.

The latest down swing has lost momentum over the past month and the price has been trading sideways, building a small base.

Wednesday’s price action broke above minor resistance of $4.40 for a second time showing that buying interest is building up.

The weekly MACD indicator is turning higher from oversold territory suggesting that the price is likely to trade higher in the coming months.

A subsequent decisive break on a closing basis above resistance of $4.40 is likely, which would confirm that a secondary bottom is in place and that higher prices are likely to unfold in the near-term.

The initial upside price target based on the breakout is $5.00. Over the medium-term, levels to $5.15 appear achievable.

Elders (ELD) – Another breakout

Elders (ASX:ELD) has been trading in a strong up trend since June 2019 which is still technically intact.

The latest up swing has lost momentum over the past two months and the price has been trading sideways, fluctuating between $9.83 and $10.79.

Wednesday’s price action broke above resistance of $10.79 confirming that the rally is likely to extend further.

The potential upside price target based on the breakout is $11.75.

The weekly and daily momentum indicators are in overbought territory, suggesting that the current bounce is likely to be arrested soon and that the near-term upside from here could be limited.

Healius (HLS) – Short-term weakness

Healius (ASX:HLS) has been trading in a strong secondary up trend since March 2020 which is still technically intact.

The recent price action broke above its key resistance of $3.31, suggesting that the long-term down trend from the April 2015 high has reversed direction and higher prices are likely to unfold in the next few years.

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

The initial downside price target is $3.30, however this level could be exceeded.

Aerometrex (AMX) – Bearish breakout

The rebound from the March 2020 low has lost momentum over the past four months and the price has been trading sideways, fluctuating within the boundaries of an imperfect descending triangle.

The lower highs on the chart were a clear warning that selling pressure is building up and that the stock is vulnerable to further weakness.

Wednesday’s price action broke on a closing basis below support of $1.25 and has confirmed the bearish triangle pattern.

The initial down-side price target based on the breakout is $0.95.

Reece (REH) - Overbought

Reece (ASX:REH) has been trading in a strong up trend since March 2020 which is still technically intact.

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

A small bearish divergence between the price and the RSI indicator has formed on the daily chart, showing that momentum is deteriorating.

Given the proximity to its key resistance of $12.87 (September 2018 high) and the overbought and deteriorating momentum conditions, we are of the view that the near-term upside from here is likely to be limited and that the price could pull-back soon.

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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