Technical analysis: 9 July 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
09 July 2021, 8:00 AM

Bega Cheese (BGA) – Double Blessed Buy

In our last update on the 21st of June 2021 we discussed the likelihood of the price declining in the short-term and highlighted that the anticipated pull back would provide a buying opportunity.

The decline was deeper than originally anticipated with the current down swing retracing close to its previous support of $5.03 where support appears to be strong and is likely to hold. A bullish divergence between the price and the daily RSI indicator has formed over the past month suggesting that the correction is approaching completion and the price is likely to bounce in the short-term.

Given the proximity to support and the oversold and diverging momentum conditions, we see the current share price weakness as an opportunity to buy the stock. The first potential upside price target is $5.80. Over the medium-term, levels to $6.30 are achievable.

Perseus Mining (PRU) – Target reached

In our update on the 21st of May 2021 we discussed the bullish implications from the breakout above the medium-term down trend line and the likelihood of the rallying over the medium-term.

A strong rally has unfolded over the past few months and our upside price target of $1.65 has now been reached. The RSI and the stochastic indicators have reached overbought territory suggesting that the price is likely to pull back in the short-term.

While we continue to like the stock over the long-term, given the proximity to its previous key resistance and the overbought momentum conditions, we are of the view that the rally is likely to take a breather in the near-term.

West African Resources (WAF) – First target reached

In our last update on the 12th of April 2021 we discussed the bullish implications from the breakout above resistance of $0.91 and the likelihood of the price trading higher in the months ahead.

A choppy but consistent rally has unfolded over the past few months and our first upside price target of $1.10 has been reached. The RSI and the stochastic indicators have approached overbought territory pointing to a likely pull back in the short-term.

The price rebounded to a band of resistance between $1.15 and $1.23 where initial selling pressure is likely to arise. Over the long-term, we continue to like the stock and we see levels to $1.20 as easily achievable.

Challenger Financial Svcs (CGF) – Bullish breakout

The decline from the February 2021 high has lost momentum over the past two months and the price has been trading sideways fluctuating within the boundaries of an imperfect ascending triangle.

Wednesday’s price action decisively broke above its minor resistance of $5.74 suggesting that the correction is likely to be over and that higher price levels are likely to unfold in the months ahead. The momentum conditions have improved over the past month supporting our positive view on the stock.

The first potential upside price target based on the breakout is $6.80. Over the medium-term, levels to $7.30 are achievable. We see any potential short-term share price weakness to unwind the overbought stochastic readings as an opportunity to buy the stock.

Kogan.com (KGN) – High conviction buy

KGN has been trading in a down trend since October 2020 which appears to be reversing direction. The down trend line from the January 2021 high marked in pink in the chart below has been broken upwards showing that the down trend is deteriorating.

The daily RSI indicator broke above its bear market resistance, which is a clear improvement in the momentum conditions and suggests that a new secondary up trend is likely to develop in the coming months. A higher low appears to be forming on the price chart which is a very encouraging sign.

The stochastic indicator has turned up from oversold territory suggesting that the price is likely to bounce in the short-term. The first potential upside price target is $13.50 followed by $15.00 over the medium-term. The current share price weakness presents a great opportunity to buy the stock.

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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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