All trading involves risk. Losses can exceed deposits.

Kumba setup for potential downside?

The price of Kumba has formed a bearish flag formation.

All trading involves risk. Losses can exceed deposits.

The pattern highlights a cumbersome move up after a strong move down, suggesting that momentum remains to the downside and possible further weakness.

For the pattern to trigger a trade, a breakout or close below 42000 would need to be confirmed.

If the pattern confirms a downside break, the recent low will become the initial support target. If this level is then breached, the bear flag predicts a further target at 38500.

Should the price of Kumba trade above the 43500 resistance level, the pattern would be deemed to have failed.

Kumba chart - 29 October

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts