Technical analysis: 7 June 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
07 June 2021, 11:00 AM

Atlas Arteria (ALX) – Ready for a breakout

The rebound from the March 2020 low has lost momentum over the past year and the stock has been trading sideways fluctuating between $5.39 and $7.10.

The price rebounded from its key support in February 2021 and has been consolidating within the boundaries of an ascending triangle.

The pattern has bullish implications and suggests that higher prices are likely to unfold in the months ahead.

Last week’s price action breached its minor resistance of $6.30 showing that buying interest is building up.

A decisive breakout is likely to occur soon, which would confirm the pattern and is likely to trigger a rally to $7.00.

Aust Securities Exchange (ASX) – Lifting our target

In our last update on the 5th of March 2021 we discussed number of bullish developments emerging on the chart and highlighted the likelihood of the stock approaching a turning point.

A strong rally has unfolded over the past few months and our initial upside price target of $72.00 has now been reached and exceeded.

The medium-term down trend line has been broken and we note a clear completion and a confirmation of an inverse head and shoulders pattern.

These developments confirmed our anticipation the down trend is reversing course and suggest that a new secondary up trend is underway.

The daily RSI indicator has moved into its bull market range supporting our positive view on the stock.

Given the improvement in the price structure and in the momentum conditions over the past two months, we lift our price target to $81.00.

Stockland (SGP) – Tracking well

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

The up trend has lost momentum over the past four months and the price has been trading sideways, fluctuating within the boundaries of an ascending triangle.

The pattern has bullish prognosis and suggests that an upward breakout is likely to occur.

In our view a subsequent break above resistance of $4.82 is likely which would confirm the pattern.

The potential upside price target based on the breakout is $5.30.

The momentum indicators are constructive and support the positive outlook for the stock in the near-term.

NEXTDC (NXT) – Building a base

The secondary correction from the November 2020 high has lost momentum over the past three months and the price appears to have been in the process of building a base.

A higher low has formed on the chart in May 2021 showing that buying interest is building up.

The weekly RSI indicator remains in its bull market range showing that the primary up trend is still in play.

While at this juncture in time there is no clear confirmation the correction is complete, we are of the view that the downside pressure is diminishing and that the stock has likely approached a turning point.

A subsequent break above resistance of $12.06 appears likely and would confirm that the correction is over.

The potential upside price target is $13.50. We see the current price levels as attractive to buy the stock.

Inghams (ING) – Target reached

In our last update on the 31st of May 2021 we discussed the bullish implications from the breakout above the medium-term down trend line and the likelihood of the price trading higher in the coming months.

The price rebounded strongly last week and our mediumterm upside price target of $3.80 has been reached in five trading sessions.

This shows that momentum is strong and that the rally is likely to overshoot.

The RSI indicator has reached overbought levels suggesting that initial selling pressure could arise around the previous resistance of $3.93 in the short-term.

A subsequent break above this level is likely which could trigger an extension of the rally to $4.25.

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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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