Technical Analysis: 27 May 2019

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
27 May 2019, 12:14 PM

Ansell (ANN) – heading higher

ANN has been trading in an upward trajectory since January 2019 and the secondary up trend is still technically intact. Friday's price action broke above minor resistance of $26.10 suggesting that the correction from the April 2019 high is likely to be over. The MACD indicator is turning positive from oversold territory suggesting that higher prices are likely to unfold in the month(s) ahead. 

The initial upside price target is $28.00, however, this level could be exceeded.

Santos (STO) – overbought 

The up trend from the December 2018 low has lost momentum over the past three months and the price has been trading sideways, fluctuating between $6.64 and $7.49. A large bearish divergence between the price, the RSI and the MACD indicators has formed on the daily chart showing that momentum has deteriorated significantly. Given the proximity to key resistance of $7.49 and the deterioration in momentum conditions, we see a break below support of $6.64 as highly likely.

The potential downside price target based on the expected breakout is $6.00.

Magellan Financial Group (MFG) – overbought

MFG has been trading in a very strong up trend since December 2018 which is still technically intact at this point. The weekly and daily momentum indicators have reached strongly overbought territory suggesting that the stock is due for a pull back. A bearish divergence between the price and RSI indicator has formed on the daily chart showing that momentum is deteriorating. The medium term up trend line on the leading RSI indicator has been broken downwards recently suggesting that the up trend is likely to be at a turning point.

We see a break below support of $41.90 as highly likely which could trigger a pull back to $39.00.

Origin Energy (ORG) – tracking well 

In our last update on May 17, 2019 we discussed the likelihood of the price breaking above resistance of $7.77 and trading higher in the near term. The breakout has occurred as expected but the price did not follow through and has returned into its trading range. Further weakness from here is likely to unfold in the short term and we will be looking to accumulate around $7.15.

Our medium term upside price target of $8.40 remains unchanged.

Stockland (SGP) – overbought 

SGP has been trading in a strong up trend since February 2019 which is still technically intact. Friday's price action rebounded to its long term down trend line crossing at $4.50 where initial selling pressure is likely to arise. The daily RSI indicator has reached strongly overbought territory suggesting that the price is likely to pull back in the short term.

Over the long term, we see a good probability of the price extending higher to $4.80.

More information

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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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