Trend: Up, but short term over­bought.

Finweek English Edition - - COMPANIES & MARKETS -

Strat­egy: Traders buy on a pull­back. Af­ter many months of mov­ing side­ways, San­lam re­cently broke out of two broad­en­ing for­ma­tions (lines 2 and 4; and lines 2 and 3). Higher tar­gets are in place. The short-term sto­chas­tic os­cil­la­tor is over­bought, so a mi­nor pull­back is very likely be­fore more up­side. Traders buy on a pull­back to R24,70 or lower. In terms of up­side tar­gets, tar­get 1 is R26,80 (mea­sured as the height of pat­tern 2-3 pro­jected up). Take half prof­its there and con­tinue with a break­ing of its prior two-day low as the trail­ing stop-loss on the re­main­der of your po­si­tion. Tar­get 2 is at R27,80 (ie, the height of pat­tern 2-4 pro­jected up). Take all re­main­ing prof­its there if reached. Place your ini­tial stop-loss – when buy­ing on a pull­back – as a close be­low R23,90. Note the trail­ing stop, as men­tioned above, to pro­tect your prof­its af­ter a rally.

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