Technical Tuesdays

10 June 2014

Our weekly technical report is compiled by in-house market analyst Shaun Murison.

In the report this week we look at the South Africa 40 index, key indicators as well as the following equities:

New Gold Platinum ETF

Life Healthcare Group Holdings Ltd

Naspers Ltd

View market data

Company data

Dividends

Economic catalysts

South Africa 40 index

Technical view

South Africa 40 cash index has proceeded to confirm the upside breakout with a close above resistance at 45050.

Short-term uptrend is now resuming in line with the long-term uptrend. The dynamic nature of our upward trend line revises the upside target further to 45950. The previous resistance at 45050 would now be anticipated as possible support should the price reverse.

Aggressive breakout traders would have already found long entry, while conservative breakout out traders would wait for a small retracement in price for long entry.

The bullish bias would be considered as weakening,  if channel support becomes broken, however this would not indicate a reversal of trend.

 

Source: ProRealTime charts, as of 10/06/2014

Equity in focus

New Gold Platinum ETF

The price of New Gold Platinum looks to be breaking out of an inverse head and shoulders formation.

The pattern is labelled with the “L”, “H” and “R” on the chart. This type of formation is considered a reversal pattern, and in the current context is considered to be short-term bullish. The recent high at 16000 is the initial target, while 16150 is the proportionate target of the height of the pattern (dotted red line) projected from the breakout level (15440).

The price closing below the right shoulder labelled “R” would consider the aforementioned to have failed.

Source:  ProRealTime charts, as of 10/06/2014

Life Healthcare Group Holdings Ltd

The price of Life Healthcare is trading within triangle formation (red lines).

This type of formation is generally expected to breakout in the same direction as the preceding trend (which in the current context is up), although it is wise to wait for the breakout to occur in either direction rather than preempting the move.

The level at 4230 marks the resistance, while 4100 marks the support of the up and downside breakout levels respectively. Should a breakout occur, the height of the pattern (320c) predicts a proportionate move in the same direction. 

Source:  ProRealTime charts, as of 10/06/2014

Naspers Ltd

The price of Naspers has broken out of a bullish flag formation. The pattern alludes to a weak move down after a strong move up, suggesting that the price momentum remains positive.

The all-time high at R1350 provides the initial upside target favoured, which if broken further favours a projected target from the pattern at R1400. Conservative breakout traders would wait for a pullback towards R1180 for long entry.

The price retracing to close below flag support at R1150 would consider the aforementioned bullish indication to have failed.

Source:  ProRealTime charts, as of 10/06/2014

Market overview

A Technical Analysis overview of key indicators and sectors with regards to trend, volatility and overbought/oversold conditions.

Click to view this week's market overview

 

 

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