Technical Tuesdays

26 August 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:

Aspen Pharmcare Holdings Ltd

Sappi Ltd

Sibanye Gold Ltd

Woolworths Holdings Ltd

View market data

Company data

Dividends

Economic catalysts

South Africa 40 index

Technical view

The South Africa 40 cash index has found support on the initial  target (45850) from the wedge formation (dotted red lines). The previous weeks guidance remains the same in that the wedge formation favours short-term weakness with 45850 providing the initial downside target, a break of which further favours a move towards key support at 45050.

The price trading above wedge resistance at 46750 would consider the failure of the short-term bearish indications implied by the wedge formation. The L, H and R? on our chart highlights the possibility of a larger head and shoulders reversal pattern forming, which would near completion should the lower wedge target be realised.

 

Source: ProRealTime charts, as of 26/08/2014

Equities in focus

Aspen Pharmcare Holdings Ltd

Aspen has broken out of the trading range between levels 29000 and 30100. Since the initial breakout, the price has returned to find support on previous resistance of the range at 30100.

This marks the first pullback since the price has indicated a renewed upward directional intent, providing a possible entry opportunity for breakout traders who missed the initial move. The recent high at 30850 provides the near-term target favoured, a break of which further favours a move towards 31200.

The 31200 target is derived by projecting the height of the pattern from the breakout level. Should the price close below the midpoint of the range at 29550 it would suggest failure of the bullish considerations.

Source: ProRealTime charts, as of  26/08/2014

Sappi Ltd 

The price of Sappi has broken out of a triangle consolidation, and looks to be continuing the preceding uptrend. Aggressive breakout traders may have already found long entry, while more conservative traders would wait for a retracement towards the 4200 level for entry.

The recent high at 4650 provides the initial target favoured, a break of which further favours a move to 4720. The 4720 target is derived by projecting the height of the triangle consolidation from the breakout level. The price trading below triangle support at 4090 would indicate failure of the bullish indication.

Source: ProRealTime charts, as of  26/08/2014

Sibanye Gold Ltd

Sibanye Gold Limited is currently reversing of the support of the range between levels 2430 and 2800. The reversal off support is accompanied by a positive divergence with the Stochastic oscillator (blue lines).

These indications are considered bullish in the near-term and the resistance of the range provides the favoured target at 2800, while a close below support at 2430 would consider the failure thereof.

Source: ProRealTime charts, as of  26/08/2014

Woolworths Holdings Ltd

Woolworths has broken out of a large trading range between levels 6030 and 7700. Since the initial breakout, the price has returned to find support on previous resistance at 7850.

This marks the first pullback since making a new all-time high and considered a favourable long entry opportunity for many using a swing trading methodology. The recent closing high at 8300 is the initial upside target favoured, while the price closing below 7700 would consider the failure of the bullish intent.

Woolworths will release their full-year results on Thursday, 28 August. Read Shaun’s pre-results analysis to find out if the latest figures will tempt investors to put Woolworths at the top of their shopping list

Source: ProRealTime weekyl chart, as of  26/08/2014

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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