Sen­ti­ment is chang­ing

Finweek English Edition - - Marketplace - Mox­ima Gama

aspen sup­plies med­i­cal prod­ucts to more than 150 coun­tries. With a mar­ket cap of R133bn, it has a strong mar­ket po­si­tion as one of the largest phar­ma­ceu­ti­cal com­pa­nies in the south­ern hemi­sphere. In mid-Jan­uary, the company an­nounced that its in­fant milk for­mula brand Alula had been reg­is­tered by China’s Food and Drug Ad­min­is­tra­tion – an im­por­tant mile­stone that paves the way for sales in the world’s big­gest in­fant milk mar­ket.

Aspen’s re­sults for the year ended 30 June 2018 were due on 13 Septem­ber, af­ter this is­sue of fin­week went to print.

Out­look: Af­ter a long streak of up­side from lows tested at 2 900c/share in 2008, Aspen pulled back as a cor­rec­tion from an all-time high at 44 870c/share in 2015. It has since strug­gled to fully re­gain those losses – as it con­tin­ues to shrug off crit­i­cism for ir­reg­u­lar price in­creases of generic drugs sold by them. Within its long-term cor­rec­tive bear trend, Aspen has re­tained firm sup­port at 23 360c/share, which means sen­ti­ment is chang­ing – in­vestors are see­ing a good en­try point.

On the charts: Aspen is headed to the re­sis­tance trend­line of its bear trend and the three-week rel­a­tivestrength in­dex (RSI) is test­ing its own re­sis­tance trend­line. Ru­mours that the company is con­sid­er­ing a part­ner for its in­fant milk for­mula busi­ness bode well for in­vestors.

Go long: Aspen would end its bear trend above 32 750c/ share – pre­sent­ing a good buy­ing op­por­tu­nity – with up­side po­ten­tial to 44 870c/share. Po­si­tions could be in­creased above 39 100c/share.

Go short: If both Aspen and the three-month RSI re­verse be­low their re­spec­tive trend­lines, sell­ers could drag the share price back to key sup­port at 23 360c/share – breach­ing that level could trig­ger a sharp drop to the sup­port trend­line of its pri­mary bull trend.

SOURCE: ShareNet

SOURCE: IRESS

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