Ausgroup - Strong breakout from trading range suggest further upside

Positive breakout. AusGroup is likely to see more upside in the days ahead after breaking out of its 3-week horizontal trading range and above the key support-turned-resistance level of $0.62 on heavy volume yesterday.

Upside momentum revived. With the RSI rebounding off strongly at the 50% mark and the MACD indicator signaling a strong bullishcrossover yesterday, these seem to suggest renewed strength in the upside momentum.

Immediate resistance at $0.72. Should the breakout materialize, we expect an immediate resistance at $0.72 (support-turnedresistance level) with the subsequent obstacle at around $0.86- $0.875 (gap zone in early Jun ’08).

Initial support at $0.62. Beyond the immediate support at $0.62, the subsequent supports are pegged at $0.565 (lower boundary of horizontal trading range and 5-month uptrend line), followed by $0.45 (troughs in mid May and mid Jun ‘09).

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