Rand-hedge Richemont makes gains on negative news

A negative reaction in the Rand after a summons to Finance Minister; Pravin Gordhan has served to drive the share price of some rand-hedge counters, below we take a look at Richemont.

Leigh- Richemont

Richemont was the biggest gainer on the Top 40 yesterday and investors may have been thinking it was about time given that the share price has been stagnant since June. Whilst looking attractive and as though it was about ready to reverse its nearly twelve month downward trend, the diagonal resistance proved to be too strong. We have now seen a strong break above 8700c and the previously noted neckline of the inverse head and shoulders pattern in August. The move came on very strong volume; 259% of the normalized volume in fact, verifying the break out of the downward channel. Looking at the oscillator and we have yet to see it move into overbought territory and given the depreciation of the Rand against major currencies we could continue to see the share price eke out further gains closer to a target of at least 9300c. Previous resistance at 9000c now becomes new support and a pullback to this level may be considered a buying opportunity for bulls. The summons and pending appearance of Finance Minister Pravin Gordhan will continue to negatively affect our local currency, local equities; in particular banks, foreign inflows and overall confidence in the political leadership of South Africa.

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

This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.