Technical analysis: 24 May 2021

About the author:

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

InvoCare (IVC) - Oversold

The primary down trend from the December 2017 high has lost momentum over the past year and the price has been trading sideways fluctuating between $9.07 and $12.65.

The current short-term down swing has approached its key support which appears solid and is likely to hold. The daily RSI indicator has reached strongly oversold levels suggesting that the price is likely to bounce soon.

The initial upside price target is $11.00, however an extension of the anticipated bounce to $11.50 is possible.

Overall, the primary down trend remains intact, the weekly momentum indicators are in their respective bear market ranges and at this juncture in time we don’t see clear signs the trend is reversing.

Therefore, we only favor a rebound to unwind the oversold momentum conditions.

A trend reversal would be in place once key resistance of $12.65 is broken upwards, however we don’t see such a breakout as imminent due to the recent significant deterioration in the daily momentum conditions and we are of the view that further consolidation is likely to be seen in the coming months.

Ampol (ALD) – Second target reached

In our last update on the 12th of March 2021 we discussed the likelihood of key support of $22.87 to attract strong buying interest and published a note with a high conviction buy on the stock.

A strong rally has unfolded over the past six weeks and our second upside price target of $28.50 has now been reached.

The momentum indicators have approached overbought territory suggesting that the near-term upside from here is likely to be limited.

While at this point there is no sign suggesting the immediate reversal of the current up swing and the price could extend further to $31.00, we see any further share price strength from here as an opportunity to lighten positions.

Data#3 (DTL) - Buy

In our update on the 15th of March 2021 we discussed our high conviction the stock is likely to rebound in the months ahead and recommended clients buy the stock.

In a follow up note on the 22nd of April 2021 we highlighted that the price is likely to pull back in the short-term before it resumes its upward trajectory.

The expected pull back took place over the past few weeks and in our view the correction is now approaching completion.

The RSI and the stochastic indicators have approached oversold territory suggesting that the price is likely to rise from here.

We believe the stock is likely to continue to trade higher in the coming months and we see the current short-term share price weakness as another opportunity to buy the stock.

Our medium-term upside price target of $7.00 remains unchanged.

Aust Securities Exchange (ASX) – Lifting our target

In our last update on the 5 th of March 2021 we discussed that the secondary down trend is likely to be at a turning point based on the proximity to key support and the bullish divergence between the price and the RSI indicator and recommended clients buy the stock.

A slow but consistent rally has unfolded over the past two months and our initial upside price target of $72.00 has now been reached.

The medium-term down trend line marked in red in the chart below has been broken upwards and the previous resistance of $74.04 has been overtaken too.

These two developments add further evidence and confidence that higher prices are likely to unfold in the month(s) ahead.

Ideally, we would like to see an improvement in the daily and weekly momentum conditions too, but nonetheless the developments in the price structure over the past two months are encouraging enough to underpin a view that the rally is likely to extend further.

Therefore, we lift our price target to $78.00.

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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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