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

Last week, ASX All-Ordinaries Index (.AORD) traded in a zig-zag pattern majorly tracking the US markets. Notably, .AORD settled at ~6877.00 with an increase of 2.33% for the week ending July 08, 2022. Domestic markets moved up due to positive Australian Building approvals data. According to the Australian Bureau of Statistics (ABS), seasonally adjusted total number of dwellings approved increased in May 2022 by 9.9% to 16,390 from 14,917 dwellings approved in April 2022.

Meanwhile, the overall ASX index is trading in a weak tone after the prices broke its rising wedge pattern on a weekly chart. As per the technical indicators, prices are trading below its 21-period and 50-period SMA and may find its next resistance level at 7291.90. The upcoming macro events that may impact the market sentiments include an update on the AU Westpac Consumer Sentiment, US Consumer Price Index, US Unemployment Claims, and US Retail Sales released monthly.

Global Markets Wrap-Up 

Wall Street indices surged last week after a sharp decline in prices in the prior week. Notably, S&P 500 settled at 3899.38 with an increase of ~1.93% while NASDAQ Composite Index also increased to reach 11,635.30 with an increase of ~4.56% for the week ending July 08, 2022. Meanwhile, the US indices increased last week despite an increase in the US unemployment claims data. The seasonally adjusted initial US unemployment claims data published by the US Department of Labor, increased by 4k to 235k for the week ending 02^nd July 2022 against the unrevised unemployment claims at 231k in the prior week.

Having understood the US market performance over the past one week, taking cues from major global news, and based on our technical analysis of ASX All-Ordinaries Index (.AORD) for the upcoming week, now let us have a look at two ASX-listed stocks from the technical standpoint. Noted below are the recommendations based on generic insights, entry price, target prices, and stop-loss for Imugene Ltd. (ASX: IMU) and Omni Bridgeway Ltd. (ASX: OBL) for the next 2-4 weeks’ duration: -

Imugene Ltd. 

Imugene Limited (ASX: IMU) is an Australian-based clinical-stage immune-oncology company providing immunotherapies that activate cancer patients’ immune systems to remove tumours. Below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

On the weekly chart, IMU stock price broke a downward sloping trend line by upside and the prices are sustaining above the breakout point from past two weeks. Now the stock is heading towards its next resistance level at AUD 0.273 and in the short-term (2-4 weeks), prices may test the level. An upside above AUD 0.273 level supported by volumes may extend buying in the stock to AUD 0.330 level.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) stood up from oversold region to ~48.88 level indicating positive price momentum. The CMP is trading above its 21-period SMA which indicates positiveness in the stock prices. However, prices are trading below its 50-period SMA, acting as an immediate resistance level. Volume analysis is showing a positive signal for the stock prices.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Imugene Ltd. 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.  Summary of recommendation is as follows:

Note: Imugene Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

Omni Bridgeway Ltd. 

Omni Bridgeway Ltd. (ASX: OBL) is engaged in providing services in civil and common law legal and recovery systems with operations spanning Asia, Australia, Canada, Europe, the Middle East, the United Kingdom, and the United States. Below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

On the weekly chart, OBL’s stock prices broke a downward sloping trend line by upside and the prices are sustaining above the breakout point from past two weeks. Now, the prices are heading towards its next resistance levels which appear to be at AUD 4.450 and AUD 4.870, and the stock may test these levels in the short term (2-4 weeks).

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, the momentum indicator RSI (14-period) is trading at ~62.27 levels, indicating bullish momentum. Prices are also trading above its 21-period and 50-period SMA which indicates positiveness in the stock prices. Volume analysis is showing a positive sign for the stock.

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, Omni Bridgeway Ltd. 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. The summary of recommendation is as follows:

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:

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by individuals with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and 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 risk, currency risks, and social and political instability risks etc.

Note 1: 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.

Note 2: 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 and we consider stocks with greater than or equal to 500,000 volumes as more liquid. 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 downtrend may take a pause backed by demand or buying interest. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest. 

Stop-loss: In general, 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. We suggest ~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. We suggest individuals to 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, volumes, technical indicators, support, and resistance levels is July 11, 2022. The reference data in this report has been partly sourced from REFINITIV.

Abbreviations

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.

Disclaimer: Imugene Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

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