Technical Analysis: 8 February 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
08 February 2021, 10:40 AM

Magellan Financial Group (MFG) – Double Blessed Buy

The rally from the March 2020 low has lost momentum over the past six months and the price has been trading in a downward trajectory. The current down swing has retraced to its previous multiple support of $46.96 where good buying support emerged over the past two weeks. Friday’s price action broke above minor resistance of $50.42 indicating that a small bottom is in now in place.

The RSI indicator completed a bottom reversal pattern from oversold levels suggesting that the price is likely to bounce in the short-term. The first potential upside price target is $55.00. Over the medium-term, levels to $60.00 appear easily achievable. Given the proximity to support and the improvement in the momentum conditions, we are comfortable to buy the stock at current price levels.

Aurizon Holdings (AZJ) – Double Blessed Buy

AZJ has been trading in a down trend over the past year which is still technically intact. The current down swing has retraced close to its previous key support of $3.38 which appears solid and is likely to hold. The down swing appears to have lost momentum over the past three months with the price posting a marginally lower low.

The leading RSI indicator completed a bottom reversal pattern from oversold territory last Friday, suggesting that higher prices are likely to unfold in the short-term.

A break above minor resistance of $3.98 appears highly likely in our view, which is likely to trigger a rally to $4.30 in the short-term. Over the medium-term, the price is likely to rebound to $5.00. Given the proximity to key support and the improvement in the momentum conditions, we see the current price levels as attractive to buy the stock.

Domain Holdings Australia (DHG) - Overbought

DHG has been trading in a strong secondary up trend since March 2020 which is still technically intact. The price rallied strongly over the past two weeks and Friday’s price action posted a fresh all-time high of $5.61.

The daily and weekly RSI and the MACD indicators have reached overbought territory suggesting that the price is likely to pull back in the short-term. While the daily momentum conditions remain constructive and we continue to like the stock over the long-term, the strongly overbought weekly readings suggest that the rally is likely to take a breather and the price is vulnerable to a pull back in the weeks ahead.

Jumbo Interactive (JIN) – Lifting our target

In our last update on the 12th of October 2020 we discussed the strong likelihood of the price bouncing of its dynamic support of $12.00 and recommended clients buy the stock. A slow but steady price advance has unfolded over the past four months and the current price has approached our second price target of $16.50. The RSI indicator remains constructive and well above its medium-term up trend line.

The price continues to post higher lows showing that buying interest is still strong. We see a good probability of the stock extending its march higher, therefore we lift our price target to $18.00.

Perpetual (PPT) – Heading higher

PPT has been trading in a consistent up trend since March 2020 which is still firmly intact. The recent pull back has retraced close to its medium-term up trend line crossing at $30.00 which is likely to act as a dynamic support.

The daily RSI indicator has turned up from oversold territory suggesting that the price is likely to rally in the month ahead. The weekly stochastic indicator bounced of the 20% oversold line, also pointing to a likely rebound in the coming weeks. The first potential upside price target is $36.00 followed by $39.00 over the medium-term.

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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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