Phat squiggly lines: Sector silver linings


Market overview

The ASX 200 had one of its strongest weeks last week, rallying around 3.5%. All major US indices also enjoyed a strong week, as investor sentiment was very much risk on.  

The beaten-up tech sector led the rally with the likes of ZIP Co (ZIP.ASX) gaining nearly 50%, Betmakers (BET.ASX) up 14%, and Brainchip (BRN.ASX) which rallied 35%. 

The XJO is now at a pivotal point and is approaching short term resistance at around 6780. A break above this level would be bullish and suggest further upside from here is likely to come.  

XJO performance graph

Overall, our bias is still towards the downside as talk of a global recession gathers pace, and inflation readings sit at multi year highs, so we ere on the side of caution during this current short-term rally.

1. Recent low and support at 6407   
2. Market is now approaching resistance around 6780 
3. Downside target at lower support level around 6000
4. Short term upside target at next resistance level around 6970

Flight Centre (FLT.ASX) 

The stock company reported on Monday and reaffirmed guidance which was well received by the market. Looking for a break higher out of current consolidation in the coming days/weeks targeting $20 in the near/mid-term.

Flight centre performance graph

1. Recent low and support around $16.60 
2. Stock has reached short term resistance at $18.00

3. Looking for a breakout of current consolidation and move back towards $20.00

Renascor (RNU.ASX) 

Leading graphite explorer Renascor has pulled back to an interesting level technically and has found support around $0.145. The stock has now rallied up to the next level of resistance at $0.195 and appears to be trying to resume its overall uptrend. We’re looking for a breakout of current resistance, and for the stock to make its way back up to $0.25.

Renascor performance graph

1.  Support and recent low at $0.145 
2. Resistance at current price around $0.185 
3. Profit target set at $0.25

Evolution Mining (EVN.ASX) 

We’re putting a speculative buy on gold producer Evolution Mining after the stock was crucified last month in June. We now believe it represents good risk/reward as it appears to have found a base and support at around $2.25. A break of $2.50 would support this view and signal a run up towards $3.00 could very well eventuate in the coming weeks. 

Evolution Mining performance graph

 1.  Recent low and support around $2.25 
2. Medium term profit target set at $3.00  
3. Profit target set at $0.25

Red 5 Limited (RED.ASX) 

Red 5 is an Australia gold producer with operations in both Australia and across Asia. Its share price has halved since touching $0.47 in April and has come back down to an interesting level.  

Technically, the stock has bounced off support at $0.22 and has now reached short term resistance around $0.245. The overall chart is encouraging, and we would not be surprised to see the stock rally backwards its next level of resistance around $0.30 which represents reasonable risk rewards should the stock break out from here.

Red 5 limited performance graph

 1.  Support and recent low around $0.22
2. Resistance at current levels around $0.245  
3. Looking for a break higher and for the stock to retest next level of resistance around $0.30

If you haven't made it to one of our Trading Edge sessions yet, you can sign up for the Trading Edge webinar series here. They're all about technical trading – strategies, pointers and live stock analysis.

And if you're not already, you should be trading like a pro with us at Opentrader.

Opentrader GAW Element advice disclaimer