Nufarm Ltd.
Nufarm Ltd. (ASX: NUF) is an Australian agricultural chemical company established in 1956. The company provides seed treatment products to the farmers which gives protection and treatment for damage caused by insects and fungus. The company manufactures and sells crop protection products like insecticides, herbicides, and fungicides. Noted below, are the key price indicators for the stock.
As per our previous recommendation on NUF as of December 07, 2020, we recommended a ‘Buy’ rating on the stock at AUD 4.21 from the technical analysis standpoint. Stock made a high of AUD 4.43 as on December 12, 2020 and witnessed upside movement of ~5.23 percent from the recommended level. However, prices were not able to hold the gains and took correction from higher levels and made a low of AUD 3.945 on January 06, 2021 driven by volatility in domestic as well as global indices. However, considering the recent price action and technical indicators analysis, we are of the view that the stock may again rebound from the current levels and hence, we recommend ‘Hold’ rating on the stock. The summary of our previous ‘Buy’ rating, revised target levels, and price movement since the previous recommendation for NUF is provided as below:
Price Action Analysis (on the Weekly Chart)
NUF's prices continuously taking support from downward trendline and are sustaining above that from the past one month and seem supportive for upside movement. Now the next important resistance level appears to be at AUD 4.43 and in the short-term (2 weeks), the prices may reach near to that level.
On the weekly chart, RSI is trading at ~46 levels, however it is still hovering in a positive trend which is supportive for the stock prices. The CMP is trading near to its mean average of 21-period, further providing strength to the prices. The CMP is trading below 50-period moving average which acts as a strong resistance level.
Conclusion:
Based on the above-mentioned price action and technical indicators analysis, we can conclude that Nufarm Ltd. is still looking technically well-placed on the chart and we recommend ‘Hold’ rating on the stock from the current price level of AUD 3.99.
Vicinity Centres
Vicinity Centres (ASX: VCX) is a leading retail property group. The company is engaged in retail property investment, property management and development. The company operates various shopping centres across Australia.
As per our previous recommendation on VCX as of December 07, 2020, we recommended a ‘Buy’ rating on the stock at AUD 1.71 from the technical analysis standpoint. Stock made a high of AUD 1.763 as on December 08, 2020 and witnessed upside movement of ~3.07 percent from the recommended level. However, prices took correction from higher levels towards its mean averages which can be considered as a healthy price pattern. Prices made a low of AUD 1.54 on January 06, 2021 driven by volatility in domestic as well as global indices. However, considering the recent price action and technical indicators analysis, we believe that the stock may again rebound from the current levels and hence, we recommend ‘Hold’ rating on the stock. The summary of our previous ‘Buy’ rating, revised target levels, and price movement since the previous recommendation for VCX is provided as below:
Price Action Analysis (on the Weekly Chart)
VCX’s prices broke the resistance level of AUD 1.692 on November 23, 2020 and sustaining above the breakout level since the past two weeks. Prices are also sustaining above the symmetrical triangle pattern from the past one and half month and seem supportive for upside movement. Now the next important resistance level appears to be at AUD 1.85 and in the short-term (2 weeks), the prices may reach near to that level.
On the weekly chart, RSI is trading at ~51 levels and hovering in an upward trajectory, indicating a positive trend in the stock. The CMP is above the 21-period and 50-period SMA, further providing strength to the prices.
Conclusion:
Based on the above-mentioned price action and technical indicators analysis, we can conclude that Vicinity Centres is still looking technically well-placed on the chart and we are recommending ‘Hold’ rating on the stock from the current price level of AUD 1.56.
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 Investors 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 risks, currency risks, and social and political instability risks etc.
Entry Price: For the given recommendation(s), Entry Price is assumed be at or above a certain level. However, a slight deviation on either side in the ‘Entry Price’ can be considered depending upon the potential expected or indicated.
Note: 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.
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.
The reference date for all price data, volumes, technical indicators, support, and resistance levels is January 06, 2021.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
AUD: Australian Dollar
RSI: Relative Strength Index
Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors 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. Our publications are NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. Past performance is neither an indicator nor a guarantee of future performance.
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