Technical Tuesdays

24 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:

Liberty Holdings Ltd

Tiger Brands Ltd

ArcellorMittal Ltd

View market data

Company data

Dividends

Economic catalysts

South Africa 40 index

Technical view

The channel resistance has served the South Africa 40 cash index well in terms of providing upside targets as well as resistance.

This week the index is retracing off channel resistance rather than consolidating as in previous weeks. This is noted by the last two days of price activity making lower highs and lower lows. The pullback has not yet indicated completion and a confluence of horizontal and channel support at 45500 is favoured in the absence of a bullish price reversal.

The short-term weakness is however not a signal of a trend reversal at this stage and trend followers would look to accumulate off support rather than trade against the longer term uptrend which still prevails. Should the price start trading below the 45500 support level, only then would the near-term uptrend be reviewed for a possible reversal.

 

Source: ProRealTime charts, as of 24/06/2014

Equity in focus

Liberty Holdings Ltd

Liberty has experienced its first pullback in price since breaking out of a triangle consolidation. The move shows a bullish intent and continuation of the preceding uptrend from March 2014.

The recent high at 13500 provides the initial target, while the height of the pattern projected from the breakout area predicts a further upside target at 13700. Further support of the bullish intent is witnessed by the strong volume (circled red) at the time of the initial breakout.

The price closing below the support of the triangle formation at 29500 would consider the bullish indications to have failed. 

Source:  ProRealTime charts, as of 24/06/2014

Tiger Brands Ltd

Tiger Brands has experienced its first pullback in price since breaking out of a triangle consolidation.

The move shows a bullish intent and continuation of the preceding uptrend from March 2014. The recent high at 31750 provides the initial target, while the height of the pattern projected from the breakout area predicts a further upside target at 32400.

The price closing below the support of the triangle formation at 29500 would consider the bullish indications to have failed. 

Source:  ProRealTime charts, as of 24/06/2014

ArcelorMittal Ltd

ArcelorMittal has formed a falling wedge pattern in a downtrend. The volume on the tail end of the move down has been extremely low, highlighting the last move down as being more of a consolidation than having a bearish directional intent.

A low volume decline and falling wedge formations are often followed by a short-term bullish reversal. The initial resistance target at 3430 is favoured, which if broken further favours a move towards resistance at 3650. The price closing below wedge support at 3100 would be indicative of a failure of the above indications.

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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