Perpetual Ltd. Prices above Crucial Resistance Level, Will Bulls Take the Prices Higher?

Summary

  • Perpetual Ltd. (ASX: PPT) has delivered ~19.30 percent returns in the last two months, on Monday the shares gained 4.36% percent.
  • On the daily charts, the stock price has broken a rising wedge pattern on the upside and taking major support from the horizontal trendline.
  • The prices are moving in a rising wedge pattern on the weekly chart and getting support from the Parabolic SAR indicator.
  • The stock prices are approaching the horizontal trendline resistance zone.

Perpetual Ltd. (ASX: PPT) has witnessed a sharp rally from the low of AUD 30.11 made on 05 March 2021 to the recent high of AUD 35.92 tested on 26 April 2021, a gain of ~19.30 percent in the last two months. On Monday, the stock prices closed at AUD 35.39 level, up by 4.36%, and was one of the top gainers in the ASX 200 Benchmark Index. The stock outperformed some of its competitors, such as Pinnacle Investment Management Group (ASX: PNI), IOOF Holdings Ltd. (ASX: IFL), and Pendal Group Limited (ASX: PDL).

Daily charts: Perpetual Ltd. Breaks out of rising wedge pattern

Source: Refinitiv, Thomson Reuters; Analysis: Kalkine Group

The stock has broken out of its rising wedge pattern at AUD 34.90 level on 26 April 2021 after consolidating for more than three months in a wedge pattern. The price registered a decisive break out of the wedge pattern that suggests a change in the trend from sideways to upward. The Stock has also broken a horizontal trendline resistance level (black color horizontal line in the above chart) at AUD 34.40 level. Post that the share price has been consolidating.

Besides, the price is trading above its 50-period SMA, which is acting as a crucial support zone below the lower band of the wedge pattern. The momentum oscillator RSI (14-period) is trading at ~65.84 levels, indicating a positive trend for the stock. MACD is also showing a positive crossover and sustaining above the centerline, further indicates an upside direction for the stock. The Parabolic SAR indicator is below the current market prices and acting as short-term support for the stock at the lower band of the pattern.

Perpetual Ltd. on the weekly chart

Source: Refinitiv, Thomson Reuters; Analysis: Kalkine Group

The prices have been moving in a rising wedge formation for the past one year and sustaining above the lower band of the pattern. In the past, the prices faced a strong resistance of a horizontal trendline at AUD 36.76 level and now, the prices are again moving towards the horizontal trendline resistance zone.

The stock price is well placed above its 50-period SMA, acting as the important support at the lower end. The momentum oscillator RSI (14-period) is trading at ~59.32 levels, indicating a possibility of further upside movement in the stock. The prices are trading above the Parabolic SAR indicator, which is acting as an immediate support zone for the stock below the lower band of the wedge pattern. MACD (Moving Average Convergence Divergence) is also showing a positive crossover, which indicates that the bulls are still in action.

Perpetual Ltd.’s price seems to be in a positive phase based on the above chart analysis and technical outlook and approaching the key resistance zone. The chart pattern suggests that there might be more action expected in PPT if the price breaks the important resistance levels in the coming weeks.

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