Technical analysis: 6 May 2021

About the author:

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

Amcor (AMC) – Bullish breakout

The rally from the March 2020 low has lost momentum over the past five months and the price has been trading sideways, fluctuating between $14.12 and $16.50.

Wednesday’s price action broke above its resistance of $15.66 suggesting that the rally is likely to extend further. We note an improvement in the daily RSI and in the weekly MACD indicators which is a very encouraging development.

The first potential upside price target is $16.70. A subsequent break above multiple and multiyear resistance of $16.78 is highly likely in our view, which would could trigger an extension of the rally to $17.50.

JB Hi-Fi (JBH) - Accumulate

In our last update on the 26th of April 2021 we discussed the likelihood of the price declining in the short-term and our initial downside price target of $47.50 has now been reached and exceeded.

The current short-term down swing has retraced close to its previous band of support between $42.30 and $43.35 where support appears to be solid and is likely to hold.

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

Given the proximity to its previous multiple support and the oversold momentum readings, we are comfortable to start accumulating the stock around current price levels.

The potential upside price target is $52.00, however this level could be exceeded.

Computershare (CPU) – Double Blessed Buy

CPU has been trading in a secondary up trend since March 2020 which is still technically intact. The current short-term down swing has retraced to its medium-term up trend line crossing at $13.70 where buying interest is likely to arise.

The RSI and the stochastic indicators have reached oversold territory suggesting that the price is likely to bounce soon.

The first potential upside price target is $15.40 followed by $16.50 in the months ahead. We see the current share price weakness as an opportunity to buy the stock.

REA Group (REA) – Target reached

In our last update on the 25th of March 2021 we discussed number of bullish developments on the chart and recommended clients buy the stock.

A strong rally has unfolded over the past month and our initial upside price target of $150.00 has now been reached and exceeded.

The up swing has lost momentum around its previous resistance of $163.75 and over the past few weeks the price has been trading in a narrow range.

The leading RSI indicator completed a head and shoulders pattern from overbought territory suggesting that the rally is likely to take a breather and potentially experience a pull back in the short-term.

A break below minor support of $154.19 would confirm that a short-term top is in place and likely trigger a decline to $145.00.

WAM Leaders (WLE) – Tracking well

WLE has been trading in a strong secondary up trend since March 2020 which is still technically intact. The recent short-term down swing has retraced to its medium-term up trend line crossing around $1.45 where initial support is likely to hold.

The daily RSI indicator has bounced off its bull market support suggesting that the price is likely to rally in the short-term. The first potential upside price target is $1.60. Over the long-term, levels to $1.70 appear achievable.

While the weekly momentum indicator’s levels are elevated, the price structure remains constructive at this juncture in time and our view on the stock is positive.

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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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