AU Technical Analysis Report

ASX-All Ordinaries Index Inched Lower, One ASX-Listed Stock to Consider at the Current Levels -LIC

25 September 2023

Company Overview:  Lifestyle Communities Limited (ASX: LIC) is an Australian property development and management company. The company builds, owns, and operates land lease communities and offers affordable housing options to Australians aged over 50. Below are the key price indicators for the stock: This Report covers the Price Action, Technical Indicators Analysis along with the Stop Loss Levels, Target Prices, and Recommendation on this one stock.

ASX All Ordinaries Index (.AORD) Market Round-Up

Last week, ASX All-Ordinaries Index (.AORD) settled on a negative note, following the bearish move from the US equity markets. Notably, .AORD settled at 7270.00 with a loss of 2.84% for the week ending September 22, 2023. The recent move in the domestic indices is majorly led by the negative indications from the global equity markets.             

On the technical front, the prices are trading below the rising trendline and are facing the resistance from the trendline. Moreover, the prices are trading below the 21-period & 50-period SMAs, which may act as a resistance level for the index. The upcoming macroeconomic events that may impact the market sentiments include an update on the AU CPI y/y, US CB Consumer Confidence, and US Unemployment Claims, etc., released weekly.

Global Markets Wrap-Up

Wall Street indices inched lower in the last week and settled on a negative note. Notably, S&P 500 settled at 4320 with a loss of ~2.93%, while NASDAQ Composite Index settled at 13211.81 with a loss of ~3.62% for the week ending September 22, 2023. The seasonally adjusted initial US unemployment insurance claims data published by the US Department of Labor decreased by 20k to 201k for the week ending 16 September 2023 against the revised Unemployment Insurance Claims at 221k in the prior week.

Having understood the US market performance over the past week, taking cues from major global news, and based on technical analysis of the ASX All-Ordinaries Index (.AORD) for the upcoming week, now let us have a look at one ASX-listed stock from the technical standpoint. Noted below recommendation is based on entry price, target prices, and stop-loss for Lifestyle Communities Limited (ASX: LIC) for the next 2-4 weeks duration: -


Lifestyle Communities Limited (ASX: LIC)

Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

On the weekly chart, LIC’s prices are trading above the rising trendline support level, indicating an upside movement. Since then, prices are continuously sustaining above the trendline support zone, indicating the possibility of a further upside hereon. Now the stock is heading toward its next resistance level at AUD 19.20 and in the short term (2-4 weeks), prices may test this level. An upside movement above AUD 19.20 level supported by volumes may extend buying in the stock to AUD 20.80 level.


Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) is moving above the midpoint and showing a reading of ~52.13 level, indicating positive price momentum. Volume analysis shows a positive signal for stock prices. The CMP is moving above the trend following indicators 21-period SMA, further supporting the positive momentum.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Lifestyle Communities Limited is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decision should be made depending on an individual’s appetite for an upside potential, risks, and any previous holdings. This recommendation is purely based on technical indicator analysis, and fundamental analysis has not been considered in this report. Lifestyle Communities Limited (ASX: LIC) was last covered in a report dated '05 September 2023'. Summary of recommendation is as follows:

Markets are trading in a highly volatile zone currently due to certain macro-economic and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the ASX All-Ordinaries Index and listed stocks’ prices:

Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2:Individuals can consider exiting from the stock if the Target Price mentioned as per the technical analysis has been achieved and subject to the factors discussed above.

Note3: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume. Liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. This report is based on ~60% Stop Loss of the Target 1 from the entry point.

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. Individuals can Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1.Individuals should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 25, 2023. The reference data in this report has been partly sourced from REFINITIV.


CMP: Current Market Price

SMA: Simple Moving Average

AUD: Australian Dollar

RSI: Relative Strength Index

Note: Trading decisions require a thorough analysis by individuals. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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