Technical Analysis: 4 February 2021

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Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
04 February 2021, 10:00 AM

Telstra Corporation (TLS) – Improvement in momentum

TLS has been trading in a down trend since February 2020 which is still technically intact. The price retraced to its previous key support of $2.60 in October 2020, from where a strong rebound occurred.

The rally took a breather over the past 10 weeks and the price has been trading sideways, fluctuating between $2.98 and $3.20.

The medium-term down trend line marked in red in the chart below has been broken upwards recently showing that the down trend is deteriorating.

Last week’s price action slightly broke above its previous resistance of $3.20 showing that buying interest is building up.

A decisive break above this level would confirm a rectangle continuation pattern which is likely to trigger a rally in the short-term.

The first potential upside price target is $3.40, however the price may overshoot.

Amcor (AMC) – Double Blessed Buy

The down swing from the November 2020 high has retraced to an important band of support between $13.54 and $14.03, where the price the price established a small base over the past week.

Wednesday’s price action gapped up decisively breaking above its minor resistance and short-term down trend line, suggesting that higher prices are likely to unfold in the short-term.

The RSI indicator broke above its resistance of 51% showing that momentum is improving, which also points to likely higher prices in the short-term.

The potential upside price target is in the range between $16.50 and $16.70.

Volpara (VHT) – Breakout on the horizon

The rebound from the March 2020 low has lost momentum over the past ten months and the price has been trading sideways, fluctuating between $1.21 and $1.57.

Slightly higher lows have been forming progressively on the daily chart showing that buying interest has been slowly building up.

The long-term up trend line on the daily RSI indicator remains intact, showing that momentum is still constructive.

The weekly RSI indicator broke above its resistance suggesting that the price is likely to follow suit.

Therefore, we are of the view that a subsequent break above key resistance of $1.57 has a high probability, which is likely to trigger a rally in the short-term.

The initial upside price target based on the breakout is $1.80, however higher price levels are achievable over the long-term.

Aust Securities Exchange (ASX) – Building a base

The ASX has been trading sideways over the past two years, fluctuating between $63.02 and $91.32.

The down swing from the September 2020 high has lost momentum over the past two weeks and the price appears to have been in the process of building a small base.

The RSI and the MACD indicators have turned up from oversold territory suggesting that higher prices are likely to unfold in the weeks ahead.

A break above minor resistance of $74.07 would suggest that the correction is likely to be over and trigger a rally in the short-term.

The initial upside price target is $78.00, however this level could be exceeded.

Pendal Group (PDL) – Heading higher

The rebound from the March 2020 low has lost momentum over the past eighth months and the price has been trading sideways, fluctuating between $5.33 and $7.38.

The current short-term down swing has retraced to its previous support of $5.91 where buying interest is likely to be strong.

The RSI indicator bounced off oversold territory suggesting that higher prices are likely to unfold in the weeks ahead.

The initial upside price target is $7.50, however over the long-term higher price levels appear easily achievable.

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Disclaimer: 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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