Technical analysis: 14 May 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
14 May 2021, 10:00 AM

APN Convenience Retail REIT (AQR) – Bullish breakout

The pull back from the August 2020 high has lost momentum over the past month and the price has been trading sideways, fluctuating between $3.37 and $3.60.

Tuesday’s price action broke above minor resistance of $3.60 suggesting that the correction is likely to reverse course and that higher prices are likely to unfold in the months ahead.

The weekly MACD indicator has turned up from oversold levels and supports our positive view on the stock over the medium-term. The first potential upside price target based on the breakout is $3.85.

Over the medium-term, a re-test of the February 2020 high of $4.10 is likely. While our ideal entry is around $3.50, we see the current price levels as attractive to buy the stock.

Magellan Financial Group (MFG) – Approaching support

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

The current short-term down swing has approached its previous support of $42.01 which appears solid and is likely to hold.

The momentum indicators have approached oversold territory suggesting that buying interest is likely to arise soon.

Given the proximity to support and to oversold momentum levels, we see the current price levels as attractive to accumulate the stock.

The first potential upside price target is $50.00. Over the medium-term, levels to $56.00 appear easily achievable.

Fortescue Metals Group (FMG) - Overbought

FMG has been trading in a strong primary up trend since July 2019 which appears to be losing momentum over the past five months.

A second lower high appears to be forming on the chart showing that the up trend is deteriorating and is likely to take a breather in the coming months.

The RSI indicator has reached overbought levels suggesting that the near-term upside from here is likely to be limited.

A bearish divergence between the price and the stochastic indicator has formed over the past month and is usually a very reliable signal, suggesting that the price is likely to pull back in the short-term.

Given the deterioration in the price structure, the overbought and diverging momentum conditions, we see the price vulnerable to a corrective decline in the weeks ahead. The potential downside price target is $21.00.

WAM Capital (WAM) – At resistance

The secondary up trend from the March 2020 low has lost momentum over the past seven months and the price has been trading sideways, fluctuating between $2.06 and $2.37.

The current short-term up swing has rebounded to its previous multiple key resistance of $2.37 where selling pressure is likely to arise.

The leading RSI indicator completed and confirmed a bearish descending triangle pattern from overbought territory suggesting that the price is likely to pull back in the short-term.

Given the proximity to its previous key resistance and the overbought and deteriorating momentum conditions, we see the potential for a decline to $2.20.

Over the medium-term, our view on the stock is neutral and we favor further sideways trading in the months ahead.

HUB24 (HUB) – Approaching support

The up trend from the March 2020 low has lost momentum over the past three months and the price has been trading sideways, fluctuating between $19.09 and $27.80.

In our last update on the 3rd of May 2021 we discussed the proximity of the price to its previous resistance, the overbought momentum levels and the likelihood of the price declining in the short-term.

A 10% pull back has unfolded over the past week and the current short-term down swing is approaching its previous support of $19.88 where buying interest is likely to start building up.

The RSI indicator is approaching oversold levels suggesting that the price is likely to bounce soon.

The potential upside price target is $26.30. While we continue to like the stock over the long-term, we are of the view that the price is likely to trade sideways in the next few months.

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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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