Technical Analysis: 25 March 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
25 March 2021, 4:15 PM

REA Group (REA) - Accumulate

After posting a record high of $163.75 and reaching overbought momentum levels in February 2021 a pull back to unwind the overbought momentum conditions took place.

The correction lost momentum over the past four weeks and the price has been trading sideways, building a small base.

The RSI indicator completed a bottom reversal pattern from oversold territory suggesting that higher prices are likely to unfold in the week ahead.

Wednesday’s price action broke above minor resistance of $139.63 suggesting that the price is likely to bounce in the short-term.

The first potential upside price target is $150.00, however higher price levels are achievable over the long-term.

While our ideal buy entry is around $115.00, we see the current share price weakness as an opportunity to accumulate the stock.

Mach7 Technologies (M7T) – Double Blessed Buy

M7T has been trading in a strong up trend since March 2020 which is still technically intact.

The up trend has lost momentum over the past month and the price pulled back, retracing to its previous support of $1.15 where initial buying interest is likely to arise.

The RSI and the MACD indicators have turned up from oversold levels suggesting that higher price levels are likely to unfold in the weeks ahead.

Wednesday’s price action broke above minor resistance of $1.25 confirming that a small bottom is in place.

Given the proximity to previous support and the oversold momentum conditions, we see the current share price weakness presenting an opportunity to buy the stock.

The first potential upside price target is $1.40, followed by $1.60 over the medium-term.

Wesfarmers (WES) – Bullish breakout

WES has been trading is a strong and consistent up trend since March 2020 which is still firmly intact.

The recent pull back has lost momentum over the past month and the price has been consolidating within the boundaries of a small ascending triangle.

Wednesday’s price action broke above minor resistance of $51.46 suggesting that the price is likely to bounce in the short-term.

The first potential upside price target is $54.00 followed by $56.00 in the coming months.

Over the long-term, higher price levels are achievable. The weekly and daily momentum indicators remain constructive at this point, therefore our long-term view on the stock remains positive.

Magellan Financial Group (MFG) – Double Blessed Buy

MFG has been trading sideways over the past two years fluctuating between $30.10 and $74.91.

The secondary correction from the August 2020 high is still intact, however we notice the first preliminary signs that the correction has approached a turning point.

The medium-term down trend line on the leading RSI indicator has been broken upwards, showing that momentum is improving.

A break above minor resistance of $46.56 would be an encouraging sign and is likely to trigger higher price levels in the near-term.

The first potential upside price target is $50.00 followed by $55.00. Over the medium-term, levels to $60.00 appear easily achievable.

Shopping Centres Australasia (SCP) - Buy

SCP has been trading in a slow but steady up trend channel since March 2020 which is still technically intact.

The recent correction lost momentum above its medium-term up trend line (showing that the buyers are becoming eager) and has been building a small base over the past month.

Wednesday’s price action decisively broke above minor resistance of $2.45 suggesting that higher prices are likely to unfold in the short-term.

The first potential upside price target is $2.60, however a rebound to its channel line crossing at $2.75 is likely in the coming months.

We see any short-term minor share price weakness to unwind the overbought stochastic readings as constructive and providing an 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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