Technical analysis: 27 May 2021

About the author:

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

APA Group (APA) – Accumulate

APA has been trading in a secondary down trend since June 2020 which is still technically intact. The down trend has lost momentum over the past three months and the price has been trading sideways fluctuating between $8.99 and $10.32.

A slightly higher low appears to be forming on the chart showing that buying interest is starting to build up. The RSI indicator has turned up from oversold territory suggesting that the price is likely to rise in the month ahead.

The potential upside price target is $10.30. While a slight improvement in the daily RSI indicator was noted in March 2021, at this juncture in time we don’t see a reversal sign of the secondary down trend and we are of the view that the price is likely to trade sideways over the medium-term.

Motorcycle Holdings (MTO) – Bullish breakout

The up trend from the March 2020 low has lost momentum over the past six months and the price has been trading sideways, fluctuating within the boundaries of a bullish ascending triangle.

Wednesday’s price action broke above resistance of $2.98 confirming the pattern and suggesting that higher price levels are likely to unfold over the mediumterm.

The potential upside price target based on the breakout is $3.50. The RSI indicator remains firmly in its bull market range at this point and supports the positive outlook for the stock.

In the short-term, the price could experience a mild pull back as the momentum indicators have reached overbought levels.

CSL Ltd (CSL) – Lifting our target

In our last update on the 5th of March 2021 we discussed that a re-test of the key support of $242.67 is likely where we expected strong buying interest to arise and the stock to rebound in the secondary time frame.

The price rallied over the past two months and our initial upside price target of $280.00 has now been reached.

The current price action is close to its previous resistance of $295.30 where initial selling pressure is likely to arise as the momentum indicators have reached overbought levels.

We do note a slight improvement in the RSI indicator and we are of the view that a subsequent break above this level is likely, which could trigger an extension of the rally to $305.00.

Regis Resources (RRL) - Double Blessed Buy

RRL has been trading in a secondary down trend since July 2020 which is still technically intact. The price action has been trading close to its lower channel line over the past six months showing that sentiment remains poor.

A large bullish divergence between the price and the RSI indicator has formed throughout November 2020 and May 2021 showing that the underlying momentum is improving and that the stock might be approaching a turning point.

The stock is oversold on a weekly and daily basis and is close to its key support of $2.20, therefore we are of the view that buying interest is likely to start building up.

Although at this point there is no reversal signal evident on the chart, given the proximity to previous key support and the oversold weekly and daily momentum conditions, we see the current share price weakness as an opportunity to accumulate the stock.

A break above minor resistance of $2.74 would be the first tentative sign that the down trend might be turning its direction and trigger a rally to $3.10.

A break above resistance of $3.13 is required to provide a clear confirmation that the secondary down trend is complete, before we can anticipate further share price advance to $3.60.

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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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