Seek Limited (ASX:SEK) Consolidation on new highs or rejection?
Seek Limited is an online employment platform actively used in Australia and Internationally.
With the pandemic and the massive slashing of jobs the recovery of covid greatly benefited Seek and is shown through the company share price reaching an all time high again. However to see Seek's future price movement we should look at Technical Analysis as they both tell there own story.
On technical terms the current share price is deemed overvalued and is prompting a correction.
Bearish Evidence:
--> RSI is oversold
--> MFI is oversold
--> Japanese Bearish Candlestick pattern "Dark Cloud Cover" developed on the 12/04/2021
--> Possible resistance level at past yearly high ($31.79)
--> Linear regression oversold (2 Standard Deviations)
--> Mean reversion oversold (2 Standard Deviations)
Bullish Evidence:
--> MACD is still quite Bullish
--> Price can consolidate on all time high (>$31.79) and act as support level
From a fundamental standpoint Seek's balance sheet is not the healthiest where Short term Assets do not cover short term liabilities aswell as SEK's debt is does not seem to be covered well by its current cashflow. However forecasted annual earnings growth is set at 36% so take its current liabilities amount with a grain of salt.
Another interesting thing found researching Seek is the amount of short sales currently active. As off the 6/04/2021 over 4.28% of Seek shares were reported as short positions making it the 27th most shorted company on the ASX. This percentage of shorting for me personally is another bearish signal.
Overall from a technical standpoint the overwhelming answer is SEK may be due for another downturn. However if the previous all time high can be broken and then be consolidated on i would consider that a continuation of its bullish movement.
For a potential short entry look for price rejection at 31.79 where price opens and closes below the level. Bearish or decreasing volume can also prompt an entry but personally i would ensure that the key level is not broken.
With the pandemic and the massive slashing of jobs the recovery of covid greatly benefited Seek and is shown through the company share price reaching an all time high again. However to see Seek's future price movement we should look at Technical Analysis as they both tell there own story.
On technical terms the current share price is deemed overvalued and is prompting a correction.
Bearish Evidence:
--> RSI is oversold
--> MFI is oversold
--> Japanese Bearish Candlestick pattern "Dark Cloud Cover" developed on the 12/04/2021
--> Possible resistance level at past yearly high ($31.79)
--> Linear regression oversold (2 Standard Deviations)
--> Mean reversion oversold (2 Standard Deviations)
Bullish Evidence:
--> MACD is still quite Bullish
--> Price can consolidate on all time high (>$31.79) and act as support level
From a fundamental standpoint Seek's balance sheet is not the healthiest where Short term Assets do not cover short term liabilities aswell as SEK's debt is does not seem to be covered well by its current cashflow. However forecasted annual earnings growth is set at 36% so take its current liabilities amount with a grain of salt.
Another interesting thing found researching Seek is the amount of short sales currently active. As off the 6/04/2021 over 4.28% of Seek shares were reported as short positions making it the 27th most shorted company on the ASX. This percentage of shorting for me personally is another bearish signal.
Overall from a technical standpoint the overwhelming answer is SEK may be due for another downturn. However if the previous all time high can be broken and then be consolidated on i would consider that a continuation of its bullish movement.
For a potential short entry look for price rejection at 31.79 where price opens and closes below the level. Bearish or decreasing volume can also prompt an entry but personally i would ensure that the key level is not broken.
Комментарий:
SEK open below previous day highs @ $31.485 so far indicating short position