Technical analysis: 6 May 2021
About the author:
- 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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