Technical Analysis: 22 January 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
22 January 2021, 9:30 AM

IDP Education (IEL) – Double Blessed Buy

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

After posting an all-time high of $25.76 in November 2020 and reaching overbought momentum levels, a pull back to unwind the overbought momentum conditions took place.

The price retraced close to its previous key support of $18.08 where strong buying interest was encountered.

The pull back has clearly lost momentum over the past month and the price has been in the process of building a small base, fluctuating within the boundaries of a bullish ascending triangle.

The leading RSI indicator completed a similar pattern from oversold territory suggesting that the price is likely to follow suit.

The MACD indicator is turning up from oversold levels also pointing to a likely rebound in the price. Given the improvement in the momentum conditions and the proximity to key support, we are of the view that the stock is likely to rally in the coming month(s).

A subsequent break above minor resistance of $21.17 is highly likely in our view, which could trigger a fast rally to $23.00.

Over the medium-term, levels to $25.50 appear easily achievable. We are comfortable to buy the stock at current price levels before an actual breakout has occurred. 

Magelan Financial Group (MFG) – Double Blessed Buy

The rebound from the March 2020 low has lost momentum over the past five months and the price has been trading sideways, fluctuating between $53.80 and $66.00.

The current short-term down swing broke below $53.80 and extended to its October 2019 low of $47.19 where initial buying interest is likely to arise.

The RSI and the MACD indicators have reached oversold territory suggesting that the price is likely to rebound soon.

The down trend line on the daily RSI indicator has been broken upwards and is the first positive development on the chart since the short-term down swing started in November 2020.

The weekly momentum indicators have reached oversold levels too also pointing to a likely rebound in the share price.

Although, at this juncture in time there is no clear reversal sign on the price chart, given the proximity to previous support and the oversold weekly and daily momentum conditions, we see the current share price weakness as an opportunity to start buying the stock. 

Eagers Automotive (APE) – Lifting our target

APE has been trading in a strong up trend since March 2020 which remains firmly intact.

The price action is contained well above its medium-term up trend line, showing that buying interest remains strong.

The daily RSI indicator remains in its bull market range at that point and supports our positive view on the stock.

Thursday’s price action broke above minor resistance of 13.85 suggesting that the price is likely to extend its march higher in the coming weeks.

We see a good probability of the price reaching a new all time high in the near-term and we lift our price target from $14.80 to $15.50. 

Mach7 Technologies (M7T) – Tracking well

M7T has been trading in a strong up trend since March 2020 which is still technically intact.

The price action remains contained well above its long and medium-term up trend lines, showing that buying interest remains strong.

The rally took a breather over the past two months and the price has been trading sideways, fluctuating between $1.15 and $1.36.

The leading RSI indicator broke above its minor resistance yesterday suggesting that higher prices are likely to unfold in the weeks ahead.

Therefore, we see a break above resistance of $1.36 as highly probable, which is likely to trigger an extension of the rally to $1.57. 

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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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