Strat­egy:

Finweek English Edition - - COMPANIES&MARKETS -

Take prof­its into fur­ther rand strength. The US dol­lar/rand is now reach­ing its min­i­mum tar­get from a large broad­en­ing for­ma­tion (lines 1 and 2) break­down in Septem­ber 2010. That tar­get is at 6,58 and is mea­sured as the height of pat­tern 1-2 pro­jected down. Over the fi­nal quar­ter of 2010 the rand traded in a smaller broad­en­ing for­ma­tion (lines 3 and 4) and a break­down in De­cem­ber then set up a tar­get of 6,51. There’s a good chance of that tar­get also be­ing reached. Note: The sto­chas­tic os­cil­la­tor (on top) is clearly over­sold for the US dol­lar. How­ever, any rand weak­ness over the short term will be tem­po­rary un­til the 6,51 tar­get is reached. Start lock­ing in par­tial prof­its on your rand longs from 6,58 all the way down to 6,51. There­after, look for the rand to weaken again to the 7,20 level.

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