Three top trending Australian stocks to watch

Keep an eye on gold price proxy Evolution Mining, as well as packaging company Pact Group Holdings and casino operator SKYCITY Entertainment Group. The charts show the ASX-listed stocks are trending.

Reserve Bank of Australia sign
Source: Bloomberg

Evolution Mining
Aussie gold miner Evolution Mining is a traders’ favourite for playing as a gold price proxy. The gold price performed strongly this year as US economic data steadily deteriorated, pushing the likely next Federal Reserve rate hikes into the second half of the year. Gold, which trades as a good proxy for zero-coupon bonds and disillusionment with global central bank monetary policy, looks like it still has plenty of upside, at least until US economic data starts to significantly improve.

Evolution Mining shares had a strong technical break out on 21 April, and is in a new uptrend as of 28 April as the Ichimoku Cloud just turned green. The Senkou Span A (the average of the blue and red lines pushed forward 26 days) has risen above the Senkou Span B (the average of the 52-day high and the 52-day low). A key test for the stock will be whether it can break through its early February resistance at around A$2.03, and a close above this level will be strongly bullish for the stock.

Evolution Mining chart

Pact Group Holdings
Pact Group reported strong underlying earnings at the end of February, and has now sustained a more than 10% compound annual growth rate (CAGR) in earnings for five straight years. Since its earnings release, the stock has gained 8% and had a strong technical break out on 17 March.

The stock is still very much in an uptrend, but it has been running into some resistance around the A$5.25 level where its rally was halted in October and November. However, if the stock manages a close above this key resistance level that will be a strong signal that the current uptrend in the stock has further to run.

Pact Group chart

SKYCITY Entertainment Group
SKYCITY, which is also listed on New Zealand’s NZX, continues to report impressive revenue growth from its flagship Auckland property. There were also signs in the company’s most recent earnings report that its Adelaide property, consistently its worst performing property, may also be turning around. The stock is heavily leveraged to a Chinese tourism boom for Australia and New Zealand over coming years, and is also a key beneficiary of any near-term declines in the Aussie and Kiwi dollars.

The stock has been closely hugging the red line (Kijun-sen) for four days of trading. The stock still remains in an uptrend after seeing a strong breakout on 15 March, and there does seem like a good chance that the stock will soon retest the A$4.70 level after selling off from there on 18 April.


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