termination rates also playing a pivotal role. It has also embarked on a journey to bring fibre-to-the-home to neighbourhoods, allowing for broadband speeds of up to 100 Mbps. All this has contributed to the spike in the price. POSSIBLE OUTCOME: The monthly relative strength index (RSI) is extremely overbought. However, Telkom could still test both the 4 700c/share and the 5 030c/ share levels – before encountering resistance that should trigger a pull-back – possibly through the support trendline of the current uptrend. A reversal below 3 940c/share should sound the alarm bells. However, we expect support to remain firm at 3 030c/share and prompt a recovery that should see Telkom resume its bull trend towards the 6 210c/share– all-time high. This pull-back would offer investors another buying opportunity, and given that Telkom is only trading in the first phase of its primary bull trend, there is plenty of room for the second and third phases to form to new Fibonacci highs in the long term. ALTERNATIVE SCENARIO: Telkom will retest its all-time high despite is mega-overbought position on the monthly chart – thereby increasing the probability of an even sharper and rapid pull-back. Either way, Telkom needs to correct!