Finweek English Edition - - COMPANIES&MARKETS -

Short-term play­ers to still buy the rand on a pull­back. In De­cem­ber, the Bri­tish pound/rand tested a multi-year rand re­sis­tance level (line 1). It then broke through it. Will that be a false break­down or not, as seen in early 2006 (see cir­cled re­gion)? More re­cently, the cur­rency has been in a small chan­nel (lines 3 and 4), with rand re­sis­tance at 9,85 (line 3). The weekly sto­chas­tic os­cil­la­tor isn’t yet over­sold and there­fore point­ing to more rand strength to come be­fore a re­ver­sal. Traders to go long (buy) the rand against the pound but with greater cau­tion, given the ex­tended trend of rand strength over re­cent months. A bounce to 10,81 (line 1) is to be bought, for a drop to 10-9,85. Place your stop-loss as a close above line 4 (10,93). Af­ter that rand rally, look for rand weak­en­ing again to more than 12.

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