ASX breakouts
First, please read the Disclaimer.
Our breakout of the week is Breville Group Ltd (BRG) which has been testing resistance at 30 for the past 12 months. It finally broke out in July and this week reached a new high. Rising Trend Index troughs signal buying pressure. Retracement that respects the new support level at 30 would confirm the bull signal, offering a target of 361.
Breville designs and distributes premium small kitchen appliances under the Breville brand in Australia, New Zealand, and North America, and the Sage brand in the UK and Europe.
Another healthy-looking breakout is small cap Dicker Data Ltd (DDR), added to the ASX 300 in 2020. The stock price has rocketed this week, breaking long-term resistance at 12. Rising trend index troughs again signal buying pressure. Hopefully we will see retracement to test the new support level. Respect of support would confirm the advance and offer a target of 152.
Dicker Data Ltd is engaged in the wholesale distribution of computer hardware, software, and related products. The company distributes a wide portfolio of products from leading technology vendors — including Cisco, Citrix, Dell Technologies, Hewlett Packard Enterprise, HP, Lenovo, Microsoft, and other Tier 1 global brands — to more than 6,900 resellers across Australia and New Zealand. Dicker Data is housed in a new 29,000 sq m distribution center in Kurnell, Sydney.
Also worth a mention is lithium explorer Lake Resources NL (LKE) which broke through resistance at 50 cents. Respect of the new support level would offer a target of 75 cents3.
Lake Resources (LKE) has four exploration projects in Argentina. Lithium brine projects at Olaroz/Cauchari, Paso, and Kachi and a hard rock spodumene project at Catamarca. Flagship Kachi is at the pre-feasibility stage, where the company is trialing direct extraction using an ion-exchange process that pushes mineral-rich brine through a bead-filled module that selectively absorbs lithium. Once the beads are saturated, Lilac uses acid to flush out the lithium. Direct extraction is new technology, in contrast to the conventional large evaporation ponds employed by most lithium brine projects, and viability is as yet unproven in a full-scale project.
Reminder
The above is only a technical view and does not take into account fundamental data like sales, operating margins, cash flows and debt levels. It is not a recommendation to buy or sell.
Notes
- Target of $36 for BRG is calculated as the trough at 24 projected above resistance at 30.
- Target of $15 for DDR is calculated as the trough at 9 projected above resistance at 12.
- Target of $0.75 for LKE is calculated as the trough at 0.25 projected above resistance at 0.50.
Quote for the Week
A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore.
~ John Hammerslough (Hat tip to Taylor Dart)
Updates for Market Analysis Subscribers
Please take advantage of our $1 special offer for the first month. Cancel at any time.
Disclaimer
Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.
Everything contained in this web site, related newsletters, training videos and training courses (collectively referred to as the "Material") has been written for the purpose of teaching analysis, trading and investment techniques. The Material neither purports to be, nor is it intended to be, advice to trade or to invest in any financial instrument, or class of financial instruments, or to use any particular methods of trading or investing.
Advice in the Material is provided for the general information of readers and viewers (collectively referred to as "Readers") and does not have regard to any particular person's investment objectives, financial situation or needs. Accordingly, no Reader should act on the basis of any information in the Material without properly considering its applicability to their financial circumstances. If not properly qualified to do this for themselves, Readers should seek professional advice.
Investing and trading involves risk of loss. Past results are not necessarily indicative of future results.
The decision to invest or trade is for the Reader alone. We expressly disclaim all and any liability to any person, with respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance upon the whole or any part of the Material.
Please read the Financial Services Guide.