OLD MUTUAL – RALLY ATTEMPT
Trend: Short term up. Medium term technically down. Long term sideways.
Strategy: Traders buy for more upside. After declining over recent months Old Mutual moved sideways in December and then broke out above both lines 2 and 3 resistances last week. That’s a bullish event. The weekly stochastic oscillator is moving up from its oversold region and is therefore still bullish. Expect more upside to come. Traders buy some now and buy more if the price happens to pull back towards line 3 (1340c) over the short term. Expect a move to its 200-week moving average, which typically provides resistance – currently at 1500c. Take some profit there. The price has the potential to reach 1600c if it can push through its 200-week moving average. It’s worth keeping part of your holding for that possibility. Keep your initial stop-loss as a weekly closing price (or two consecutive daily closes) below 1330c.