Technical Analysis: 26 September 2019
About the author:
- Author name:
- By Violeta Todorova
- Job title:
- Senior Technical Analyst
- Date posted:
- 26 September 2019, 3:06 PM
S&P 500 – Hesitates around 3,000
The correction from the July 2019 high has found support at 2,822 (below our target of 2,880) from where a rebound has unfolded over the past month. The up swing re-visited its all-time high of 3,027 where selling pressure appears to be building up.
The RSI and the MACD indicators have approached overbought territory suggesting that the short term rally is likely to pause soon.
The weekly stochastic indicator has reached overbought territory, pointing to a likely pull back in the short term.
Tuesday’s price action broke below minor support of 2,978 suggesting that a short term top could be in the making.
Given the proximity to key resistance and the overbought momentum readings, we are of the view that the chances of a 5-10% move from here are more likely to be to the downside.
The initial downside price target is 2,850.
The new key support to monitor moving forward is 2,822.
S&P/ASX 200 (XJO) – Approaching its all-time high
The correction from the July 2019 high has found support at 6,393 from where a strong rebound unfolded over the past month.
The medium term up trend line has been broken downwards in August 2019 and at present the index is trading in a range between 6,396 and 6,875 which are important support and resistance levels respectively.
While at this point there is no sign that the rally is reversing course, we note that the weekly and daily momentum indicators are approaching overbought levels and the price is approaching its all-time high of 6,875 where initial selling pressure is likely to arise.
Given the proximity to key resistance, the overbought momentum levels and the seasonally weak month of October, at this juncture we remain cautious and see the short term upside from here as limited.
AMP Ltd (AMP) – Short term pull back
AMP has been trading in a primary down trend since March 2018 which is still firmly intact.
The recent short term up swing has rebounded to its previous resistance of $1.94 where initial selling pressure is likely to arise.
The RSI and the MACD indicators have reached overbought territory suggesting that the price is likely to pull back in the short term.
The potential downside price target is $1.65.
Overall, despite the stock being oversold on a long term basis, we don’t see a sign of reversal of the primary down trend yet.
Oil Search (OSH) – Short term pull back
OSH has been trading in a primary down trend since October 2018 which is still technically intact.
The current short term up swing has lost momentum over the past few days with Wednesday’s price breaking below minor support of $7.49.
The RSI and the MACD indicators have reached overbought territory suggesting that the price could pull back in the short term.
The expected short term share price weakness would provide a buying opportunity.
We would monitor the price closely and will provide an update in due course.
Morgans clients can login to view all recent technical analysis on companies we cover by browsing the research section and filtering by 'technical analysis' in the Market Updates section. If you are interested in finding out more, please contact your nearest Morgans office.
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.