DISCOVERYVERY – IMPORTANT BREAKOUT
Trend: Up. Strategy: Buy on either a close above R30 or on a pullback to R28. • Discovery has broken out of a large broadening formation ( lines 1 and 2) after moving sideways for the past two years. This breakout is a significant event and should lead to far higher prices for this stock. • The weekly Stochastic Oscillator ( on top) is still overbought and can pull back further in the short term, nevertheless the bigger picture looks far more positive now. • Buy Discovery on either two consecutive closing prices above R30, or on a pullback to R28, whichever happens first. • The minimum upside target is R42 over the months ahead. Place your initial stop loss as a closing price below R27. While many industrial stocks on the JSE have had an excellent run over the past year, Discovery is one that still has great upside potential.