Technical Analysis: 21 December 2020
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Senior Technical Analyst
- Date posted:
- 21 December 2020, 10:00 AM
Nanosonics (NAN) - Overbought
NAN has been trading sideways over the past year, fluctuating between $4.01 and $7.73.
The correction from the June 2020 high has found strong support in November 2020 and the price has bounced strongly over the past six weeks.
Last week’s price action posted a fresh record high of $7.81, reaching strongly overbought daily momentum readings.
While we continue to like the stock over the long-term, given the proximity to key resistance and the strongly overbought momentum readings, we are of the view that the short-term upside from here is likely to be limited.
We see the current share price strength as an opportunity for active traders to lighten positions.
Regis Resources (RRL) – Double Blessed Buy
RRL has been trading sideways over the past two years fluctuating between $2.90 and $6.72.
After reaching a high of $6.18 in July 2020 the stock started trading in a secondary correction which is still technically intact.
A bullish divergence between the price and the RSI indicator has formed over the past two months, showing that momentum is improving.
The RSI indicator has been fluctuating within the boundaries of an ascending triangle suggesting that there is a high probability of an upward breakout to occur.
A break above minor resistance of $4.04 is highly likely, which could trigger a fast rally to $4.40. Over the medium-term, levels to $4.80 appear easily achievable.
Technology One (TNE) – Approaching support
TNE has been trading sideways over the past year, fluctuating between $6.36 and $10.26.
The current short-term pull back has approached a band of support between $7.47 and $7.97 where initial buying interest is likely to arise.
The daily RSI and stochastic indicators have reached oversold levels, suggesting that the price is likely to bounce in the short-term.
The initial upside price target is $9.00, however over the medium-term higher price levels are achievable.
Given the proximity to a band of support and the oversold momentum conditions, we see the current price levels as attractive to accumulate the stock.
Reece (REH) - Overbought
REH has been trading in a strong secondary up trend since March 2020 which is still technically intact.
Last week’s price action entered uncharted territory and has posted a new record high of $16.74.
The daily RSI and MACD indicators have reached strongly overbought territory suggesting that the price is vulnerable to a pull-back in the short-term.
The weekly momentum conditions are overbought as well and we note a small bearish divergence between the price and the RSI indicator, which suggests the rally is likely to take a breather in the coming weeks.
While we continue to like the stock over the long-term, given the overbought weekly and daily momentum readings, we are of the view that the near-term upside from here is likely to be limited.
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