Technical Analysis: 5 February 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Former Senior Technical Analyst
Date posted:
05 February 2021, 9:30 AM

Centuria Office REIT (COF) – Double Blessed Buy

The rebound from the March 2020 low has lost momentum over the past eight months and the price has been trading sideways, fluctuating between $1.83 and $2.36.

The current short-term down swing has retraced close to its band of support between $1.83 and $1.89 where buying interest is likely to arise.

The RSI indicator has reached oversold territory suggesting that the price is likely to bounce soon.

Given the proximity to support and the oversold momentum conditions, we see the current price levels as attractive to buy the stock.

The first potential upside price target is $2.20, followed by $2.35 over the medium-term.

Inghams (ING) – Double Blessed Buy

The down trend from the February 2019 high has lost momentum over the past year and the price has been trading sideways, building a large base.

Thursday’s price action broke above resistance of $3.43 (which was our short-term target) suggesting that the rebound from the November 2020 low is likely to continue.

The daily RSI indicator broke above its sideways market range which is the first meaningful improvement in momentum in a while.

The weekly RSI indicator broke above its bear market resistance suggesting that higher prices are likely to unfold over the medium to long-term.

Our second price target of $3.77 remains unchanged, but given the improvement in the daily and weekly momentum conditions yesterday, we see a good probability of the stock subsequently breaking out of its trading range.

Woolworths (WOW) – Tracking well

WOW has been trading in an upward trajectory since March 2020 which is still technically intact.

The medium-term up trend line on the RSI indicator still holds support, showing that momentum is still constructive.

The current up swing broke above resistance of $40.79 confirming an imperfect ascending triangle.

The pattern has bullish implications and suggests that higher prices are likely to unfold in the coming months.

The potential upside price target is $43.90. Over the long-term, higher prices are achievable.

Wesfarmers (WES) - Overbought

WES has been trading in a strong up trend since March 2020 which is still technically intact.

The recent price action reached a fresh all-time high of $55.57 pushing the RSI indicator into overbought territory.

The MACD and the stochastic indicators also reached overbought territory suggesting that the stock is likely to pull back soon and potentially revisit its medium-term up trend line crossing at $51.50.

Over the long-term, we continue to like the stock and at this point we don’t see a reversal of the primary up trend.

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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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