Technical Analysis: 29 January 2021

About the author:

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

The A2 Milk Company (A2M) – Double Blessed Buy

After reaching an all-time high of $20.05 in June 2020 and overbought and diverging daily and weekly momentum conditions, a secondary down trend took place.

The price has retraced close to a band of key support between $8.14 and $9.19, where strong buying interest is likely to arise.

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

A higher low appears to have formed on the daily chart over the past few days showing that buying interest started building up.

The daily RSI and MACD indicators have turned up from oversold levels also pointing to a likely rebound in the short-term.

The first potential upside price target is $11.75. Once minor resistance of $11.75 is broken, the December 2020 gap is likely to be filled, which means the price is likely to trade higher over the medium-term.

The potential medium-term upside price target is $13.17.

Given the proximity to a band of key support, the oversold momentum conditions and the improvement in the price structure, we are comfortable to buy the stock around current price levels.

Sydney Airport (SYD) – Accumulate

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

After gapping up and reaching a high of $7.49 in November 2020 a pull back to unwind the strongly overbought momentum conditions took place.

The current short-term down swing has retraced close to a band of support between $5.37 and $5.45, where initial buying interest is likely to arise.

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

Given the proximity to a band of support and the oversold momentum conditions we are of the view that the near-term downside from here is likely to be limited and that buying interest is likely to start building up.

While our ideal entry is around $5.45 we are comfortable to start accumulating our current price levels.

The initial upside price target is $6.50, however over the long-term higher price levels are achievable.

Waypoint REIT (WPR) – Double Blessed Buy

The rebound from the March 2020 low has lost momentum over the past seven months and the price has been trading sideways, fluctuating between $2.44 and $2.87.

The recent short-term down swing has retraced to its previous key support, where the price started building a small base.

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

A break above minor resistance of $2.58 would suggest that the short-term down swing is complete and is likely to trigger higher prices in the near-term.

The potential upside price target is $2.87. Given the proximity to support and the oversold momentum levels, we are comfortable to buy the stock around current price levels.

Inghams (ING) – Heading higher

The down trend from the February 2019 high has lost momentum over the past year and the price has been trading sideways, fluctuating between $2.83 and $3.77.

The recent price action has rebounded from its key support and now we note an improvement in the momentum conditions.

Thursday’s price action broke above minor resistance of $3.24 suggesting that higher prices are likely to unfold.

The first potential upside price target is $3.43 followed by $3.77 over the medium-term.

Over the long-term, we favor further sideways trading as the momentum indicators remain in neutral territory.

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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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