With Russia on the verge of sending troops into Ukraine, markets are feeling a little edgy at the moment, which has led to a spike in volatility in recent weeks. Lately, the ASX 200 is holding support around 7,180, however, global macro themes are forcing the market to test this level greatly.
From a technical standpoint, the recovery seen at the start of the month has stalled, with consolidation taking place between 7,170–7,300. It’s difficult to see what upcoming catalysts there are that will push the market higher in the immediate term, so further consolidation or selling from here wouldn’t surprise.
Reiterating our key point from last week’s note, we believe now is the time to be an active investor and to be selective with what stocks you add and sell going forward. Having a solid trading plan in place – especially for scalping or short-term trading – can improve results and reduce losses. As such, traders are encouraged to stick to their trading rules and strategies and be diligent in the current environment.
1. Short-term resistance in place around recent high of 7,325
2. Recent low and support around 6,800
3. Recent high around 7,620
1. Breakout of resistance and new 12-month high off the back of rising tensions in Europe
2. Initial target of $30 and next level of resistance well in reach after initial break
Last week, we put out a bullish note on Woodside Petroleum when the stock was trading around $27. We were of the view that the technical picture suggested further upside was likely which so far has played out as we expected, with the stock retesting resistance at $27.50 and breaking through this level to make a new 12-month high. It's currently trading at $28.95, which is approximately 7% higher since our call last week.
Tensions between Ukraine and Russia will continue to be supportive of oil prices, but should a deal be reached and tensions eased, you can expect some profit-taking to occur and for the sector to see some money come out of it while investors reassess the situation.
1. Bounce off long term support at $9.80
2. Long-term downtrend
3. Break of downtrend on reasonable volume
4. Medium-term profit target at $12.50
Lendlease is one of Australia’s top-tier property developers and managers and has had a challenging past 24 months. As office spaces quickly became ghost towns, Lendlease saw lower margins and downgrades to earnings, with no real end in sight as to when things will normalise from an occupancy perspective.
Employees are starting to return to the office with some companies now mandating a minimum three days per week. Sydney CBD is beginning to show signs of the old hustle and bustle it once had in what feels like a lifetime ago. Fundamentally, Lendlease stands to be a net beneficiary of this transition.
From a technical standpoint, Lendlease looks interesting and is today breaking a 14-month downtrend on decent volume, which is positive. If it can find a bit of momentum from here, we’d expect the stock to push up towards $12.50 in the medium-term, or approximately 14% higher. It's also coming off strong support at around $9.80 which strengthens the case for further upside from here.
Phat squiggly lines is where pro traders get a technical take on the stock markets – with Kieran Neeson, Opentrader's in-house trading guru.
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