Technical analysis: 3 June 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
03 June 2021, 5:00 PM

Santos (STO) – Bullish breakout

STO has been trading in a secondary up trend since March 2020 which is still technically intact. The recent pull back has retraced close to its static and dynamic support around $6.50 which appears solid and is likely to hold.

The price rebounded over the past week with Wednesday’s price action breaking above its down trend line from its March 2021 high.

The RSI indicator broke above its bear market range resistance of 60% suggesting that the correction is likely to be completed.

Given the improvement in the price structure and in the momentum conditions, we are of the view that the price is likely to trade higher in the coming month(s).

The first potential upside price target is $7.80, followed by $8.50 over the medium-term.

Aventus Group (AVN) – Ready for a breakout

AVN has been trading in a strong secondary up trend since March 2020 which is still technically intact. The stock re-tested its previous key resistance of $3.06 three time over the past month, where selling pressure has been encountered.

Despite the initial reaction around this level, the daily RSI indicator remains firmly in its bull market range, showing that momentum is still constructive.

The weekly stochastic indicator has turned up from oversold territory suggesting that a break above resistance of $3.06 is likely to be seen in the short-term.

The initial upside price target based on the breakout is $3.20.

Frontier Digital Ventures (FDV) – Ready for a breakout

After reaching an all-time high of $2.04 in January 2021 and overbought and diverging momentum levels on a daily and weekly basis, a deep pull back to unwind the overbought momentum conditions took place.

The price retraced close to its 61.80% Fibonacci retracement ratio crossing at $1.11 and a previous support of $1.16. Given the proximity to a cluster of support we believe buying interest is likely to start building up.

The daily RSI indicator completed a small bottom reversal pattern from oversold territory pointing to a likely rebound in the short-term.

The daily MACD and the weekly stochastic indicators have turned up from oversold levels, also suggesting that the price is likely to rally in the short-term.

While at this juncture in time there is no clear reversal signal on the chart, given the proximity to a band of support and the oversold and improving momentum conditions, we are of the view that a breakout above minor resistance of $1.30 is imminent, which could trigger a rally to $1.50 in the weeks ahead.

QBE Insurance Group (QBE) – Lifting our target

In our last update on the 29th of December 2020 we discussed the likelihood of buying interest to arise around support of $8.17 and the subsequent rebound in the following months.

A consistent rally has unfolded over the past five months and our second upside price target of $10.50 has now been reached.

The current short-term up swing broke above its previous key resistance of $11.03 confirming a large bottom reversal pattern and suggesting that higher prices are likely to unfold over the medium-term.

The first potential upside price target is $12.00, however over the long-term higher price levels are achievable.

Reliance Worldwide (RWC) – Tracking well

RWC has been trading in a strong up trend since March 2020 which is still technically intact.

The latest up swing has lost momentum over the past month and the price has been trading sideways, fluctuating within the boundaries of an ascending triangle.

The pattern has bullish implications and suggests that a break above resistance of $5.35 is likely. The daily RSI indicator remains firmly in its bull market range also supporting the positive outlook for the stock.

The potential upside price target based on the pattern is $5.80. Over the medium-term, we see levels to $6.00 as achievable.

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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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