A topical look at technical analysis factors for a number of key markets, and ASX stocks of interest.
The theme for today's ThinkTechnical is 'outperformance'. A common investing method amongst professional investors is to target stocks which are outperforming the broader market index. Often, the best opportunity to identify outperformance is when the index is taking a beating.
Today, we find the ASX200 down nearly 2% with only one sector (Gold) showing gains. Let's take a look at some interesting charts of companies bucking the trend today, and showing some modest gains despite the carnage.
Domino's Pizza Enterprises Limited (DMP)
Domino's appears set to break to 3-year highs today. It is well supported by dynamic resistance from the short term moving averages around $65, and static support from the 19 Feb high of $66.19.
With little static resistance overhead, an entry around current levels with a stop loss below the dynamic support zone appears to offer an attractive reward-risk profile.
FINEOS Corporation Holdings (FCL)
FCL is a relatively new entrant to the ASX, having listed in August 2019. This means that its current breakout sends it to new all time highs, and therefore FCL's price has no overhead static resistance to contend with.
Dynamic support should be found at the short term moving averages around $3.47, and static support between the 2 June high of $3.70 and 27 Feb high of $3.82.
Nextdc Limited (NXT)
If the 3 April high of $10.40 is an outlier, NXT simply requires a close above static resistance from the 24 June high of $10.21 to signal a likely break to new all time highs.
It is often prudent to buy when a stock is breaking out of a congestion zone, and whilst it is still close to its short term dynamic support zone. This is possibly the case for NXT as dynamic support can be found around $8.34 giving a risk of approximately $2. Given the new highs, the reward profile is open ended.
Temple & Webster Group Ltd (TPW)
TPW is a clear outperformer, not just for today's trading session, but over the last 1 month, 3 months, and 12 months periods. Like FCL and NXT, the price is moving to new all time highs, and therefore there is no overhead static resistance to contend with.
Dynamic support from the short term moving averages will likely be found around $5.21, and static support at the 10 June high of (coincidently) $5.21.