SANLAM – HIGHER TARGETS
Trend: Up, but short term overbought.
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.