Technical analysis: 1 July 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
01 July 2021, 9:00 AM

Collins Foods (CKF) –Target reached

CKF has been trading in a strong up trend over the past year, rallying from a low of $3.50 on the 18th of March 2020 to an all-time high of $13.25 on the 29th of June 2021.

In our last update on the 5thof November 2020 we discussed number of bullish developments on the chart and recommended clients buy the stock at $9.67.The up trend re-gained momentum in March 2021 and our medium-term upside price target of $11.00 has now been reached and exceeded.

The weekly and daily momentum indicators have reached overbought territory and a large bearish divergence between the price and the daily RSI indicator has formed over the past three months, suggesting that the strong up trend is likely to take a breather in the coming months. The minor support of $11.88 has been broken downwards on Wednesday showing that the sellers are gaining  momentum. Given  the  recent  deterioration  in  the  momentum conditions and in the price structure, we are of the view that the stock is likely to trade sideways in the months ahead.

Tyro Payments (TYR) –Lifting our target

In our last update on the 12thof February 2021 we discussed that the 61.80% Fibonacci retracement ratio crossing at $2.30is likely to act as a dynamic support for the stock and recommended clients buy the stock.

The strong rally that ensued reached our price target of $3.60 quite quickly but subsequently lost momentum and over the past three months the price has been trading sideways, fluctuating within the boundaries of a bullish ascending triangle. The daily RSI indicator remains firmly in its bull market range showing that momentum is still strong.

Wednesday’s price action bounced off its ascending triangle up trend line, suggesting that higher prices are likely to unfold from here. Given the continuously strong price action and constructive momentum conditions, we lift our price target. In the short-term, the price is likely to rebound to the resistance of the triangle of$4.00, which is likely to be broken at some point and trigger a rally close to the all-time high of $4.53.

Mach7 Technologies (M7T) -Accumulate

The strong up trend from the March 2020 low has lost momentum and over the past six months the price has been trading in a correction mode. The correction retraced to its 50.00% Fibonacci retracement ratio crossing at $0.98 which is likely to act as a dynamic support for the stock.

The weekly RSI indicator has approached oversold territory suggesting that the decline is likely to be arrested soon. The medium-term down  trend  line  on  the  daily RSI indicator has been broken  upwards recently, which is the  first bullish development with medium-term implications since the correction started.

Given the improvement in the momentum conditions we are of the view that a subsequent break above minor resistance of $1.14 is highly likely, which ultimately would confirm the correction is complete. The initial upside price target based on the anticipated breakout is $1.30. We are comfortable to accumulate the stock before an actual breakout has occurred.

Livehire (LVH) –Lifting our target

In our last update on the 18thof December 2020 we discussed number of bullish and encouraging developments on the chart and highlighted the stock is likely to trade higher in the months ahead.

A strong rally has ensued and our price target of $0.42 has been reached in March 2021.A pull back to unwind the overbought momentum conditions took place over the past few months and now we see some positive developments suggesting the correction from the March 2021 high is complete.

The long-term up trend line crossing at $0.33 is still intact and providing support, the latest down trend lines on the price and on the RSI indicator have been broken upwards and yesterday’s price action broke above minor resistance of $0.40. All these developments suggest that higher prices are likely to unfold over the medium-term. We are of the view that levels to $0.47 are easily achievable in the coming months.

JB Hi-Fi (JBH) –Lifting our target

In our last update on the 6thof May 2021 we discussed the proximity to key support and the oversold momentum conditions and recommended clients buy the stock.

The price extended higher slowly but steady and we now see a clear formation of a bullish ascending triangle which is an encouraging development. The current upswing broke above minor resistance of $49.43providing the required confirmation and suggesting that higher prices are likely in the weeks ahead.

Given the improvement in the price structure we lift our price target from $52.00 to $54.60. Any short-term share price weakness in the very short-term would provide an opportunity to add to positions.

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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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