Technical analysis: 17 May 2021

About the author:

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

Xero (XRO) – Approaching support

The up trend from the March 2020 low has lost momentum over the past five months and the price has been trading sideways, fluctuating between $104.44 and $157.99.

The current short-term down swing is approaching its key support of $104.44 where initial buying interest is likely to arise. The RSI and the stochastic indicators have reached oversold levels suggesting that the price is likely to bounce soon.

While we do note a deterioration in the price structure, which suggest that the up trend is likely to take a breather in the coming months, we see the current share price weakness providing an opportunity for active traders to buy the stock.

The initial upside price target is $135.00, however over the long-term, higher price levels are achievable.

NEXTDC (NXT) - Oversold

After reaching a record high of $14.10 in November 2020 the up trend reversed course and the stock has been trading in a correction mode.

The current short-term down swing is approaching its static support of $10.06 and is not far from its down trend channel line crossing at $9.00 which usually acts as a dynamic support.

The RSI and the stochastic indicators have approached oversold territory suggesting that the decline is likely to be arrested soon.

Given the proximity to static and dynamic support and the oversold momentum readings, we are of the view that any further downside from here is likely to be limited.

While our ideal entry is around $10.00, given the current set up, we are comfortable to start accumulating the stock. The first potential upside price target is $11.50. Over the long-term, levels to $13.00 appear easily achievable.

Eagers Automotive (APE) – Double Blessed Buy

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

The current short-term pull back has brought the momentum indicators into oversold levels, which suggests that the price is likely to bounce in the short-term.

The RSI indicator has retraced to its bull market range support around 40.00%, showing that the momentum conditions are still constructive and that the up trend is likely to extend course.

In our view, the current short-term correction presents a good opportunity to buy the stock. The initial upside price target is $17.00, however the price may overshoot and reach higher levels.

Atlas Arteria (ALX) – Ready to breakout

The rebound from the March 2020 low has quickly lost momentum and over the past year the price has been trading sideways, fluctuating between $5.48 and $7.10.

The price rebounded from its key support in February 2021 and over the past two months has been trading within the boundaries of a bullish ascending triangle.

The higher lows clearly shows that buying interest is building up and a breakout above minor resistance of $6.28 is highly likely in our view. Once resistance is cleared a fast rally to $7.10 is likely to unfold.

Given the improvement in the price structure, we are comfortable to buy the stock while is in its trading range before the anticipated breakout occurs.

Antisense Therapeutics (ANP) - Double Blessed Buy

The strong up trend from the March 2020 low has lost momentum over the past two months and the price has been trading within the boundaries of a symmetrical triangle.

The current short-term down swing has retraced to the lower boundary of the triangle crossing at $0.17 where buying interest is likely to arise.

The momentum indicators have reached oversold territory suggesting that the price is likely to bounce in the short-term.

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

The first potential upside price target is $0.21, however an extension of the anticipated rally to $0.24 is likely in the coming month(s).

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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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