Technical Analysis: 11 January 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
11 January 2021, 11:35 AM

Lovisa (LOV) – Tracking well

LOV has been trading in a secondary up trend since March 2020 fluctuating within the boundaries of an up trend channel. The medium-term up trend line on the RSI indicator still holds support showing that momentum remains constructive at this point. The latest up swing has lost momentum and the price has been consolidating over the past month, making progressively higher lows, showing that buying interest is still building up.

The RSI indicator has retraced to its up trend line and the stochastic indicator has reached oversold territory, both suggesting that the price is likely to bounce soon. The first potential upside price target is $12.20, followed by $13.80 over the medium-term.

Aust Securities Exchange (ASX) - Oversold

ASX has been trading in a strong primary up trend over the past ten years which is still technically intact. After reaching an all-time high of $91.32 in September 2020 a large bearish divergence between the price and the RSI indicator has formed on the weekly chart showing that momentum has deteriorated.

A deep pull back has unfolded over the past five months with the current price action approaching its key support of $63.02. The weekly and daily momentum indicators have reached oversold territory suggesting that the decline is likely to be arrested soon.

Although at this time there is no clear reversal signal on the chart, given the proximity to key support and the weekly and daily oversold momentum conditions, we are of the view that the near-term downside from here is likely to be limited.

Aristocrat Leisure (ALL) – Heading higher

ALL has been trading in a secondary up trend over the past nine months fluctuating within the boundaries of an up trend channel. The latest short-term pull back within the up trend channel has lost momentum over the past month and the price has been consolidating within the boundaries of a small ascending triangle, right above its medium-term up trend line.

The RSI and the stochastic indicators have turned up from oversold levels on Friday suggesting that higher prices are likely to unfold in the short-term. We are of the view that the medium-term up trend line currently crossing at $30.20 is likely to act as a dynamic support for the stock.

Given the proximity to support and the oversold momentum conditions, we see a good probability of the price rebounding from here. The first potential upside price target is $36.00, however this level could be exceeded.

Megaport Limited (MP1) – Approaching support

The secondary up trend from the March 2020 low has lost momentum since August 2020 and the price has been trading in a correction mode, positing three lower highs on the chart.

The current down swing is approaching a band of support between $11.78 and $12.42 where initial buying interest is likely to arise. The weekly and daily momentum indicators are approaching oversold territory suggesting that the pull back could be arrested soon.

Although, at this point there is no reversal signal evident on the chart, given the proximity to a band of support and to oversold momentum levels, we are of the view that the short-term downside from here is likely to be limited and the price could rebound soon.

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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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