Technical Analysis: 9 April 2021
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Former Senior Technical Analyst
- Date posted:
- 09 April 2021, 11:30 AM
The A2 Milk Company (A2M) – Double Blessed Buy
After reaching a record high of $20.05 in June 2020 the prior up trend reversed direction and the price has been trading in a downward trajectory since.
While the sequence of lower lows and lower highs of the new secondary down trend is still intact, we note a large bullish divergence between the price and the daily RSI indicator has formed over the past four months.
This shows that momentum is improving and that the price has approached a turning point. The weekly RSI and MACD indicators have reached strongly oversold levels suggesting that the current decline is likely to be arrested soon.
Given the oversold and improving daily and weekly momentum conditions and the proximity to a previous key support and resistance of $8.15, we are comfortable to start buying the stock.
The first potential upside price target is $9.30 followed by $9.70.
Breville Group (BRG) – Breakout is imminent
The up trend from the March 2020 low has lost momentum over the past seven months and the price has been trading sideways fluctuating between $23.27 and $32.85.
The current short-term down swing has lost momentum over the past three weeks and the price has been in the process of building a small base.
The leading RSI indicator completed a bullish ascending triangle on Thursday, showing that momentum is improving and suggesting that the price is likely to break above minor resistance of $28.28, which would signal that the correction is complete.
Given the improvement in the momentum conditions, we are comfortable to buy the stock before an actual breakout from the consolidation has occurred.
The first potential upside price target is $30.00, followed by $33.00 over the medium-term.
Chorus (CNU) - Oversold
After posting a record high of $8.78 in September 2020 and forming and completing a bearish descending triangle, a secondary down trend has started.
The current down swing has retraced to its previous multiple support and resistance zone around $6.00 where initial buying interest is likely to arise.
The weekly and daily momentum indicators have reached strongly oversold levels suggesting that the price is likely to bounce in the shortterm.
While at this point there is no reversal signal insight and we note a deterioration in the weekly momentum conditions, which suggests that it could take a while for the price to fully recover to its previous highs, we are comfortable to start accumulating the stock around current price levels.
The first potential upside price target is $6.50 followed by $6.90 over the medium-term.
Western Areas (WSA) – Bullish breakout
WSA has been trading sideways over the past year fluctuating between $1.86 and $3.10.
The current secondary down swing has retraced close to its support where buying interest has been building up over the past three weeks.
Thursday’s price action broke above minor resistance of $2.15 suggesting that the secondary correction is complete and that higher price levels are likely to unfold in the months ahead.
The first potential upside price target based on the breakout is $2.40. Over the medium-term, levels to $2.80 appear achievable. Any short-term share price weakness should be considered a buying opportunity.
Corporate Travel Management (CTD) – Tracking well
CTD has been trading in a steady secondary up trend since March 2020 which is still technically intact. The current short-term pull back has retraced to its previous support of $18.87 where buying interest is likely to start building up.
The RSI indicator has approached its medium-term up trend line showing that the price is likely to bounce soon. The first potential upside price target is $21.50.
Over the medium-term, levels to $24.00 appear easily achievable. Given the proximity to oversold levels and to previous support, the current price presents 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.