richemont is one of the world’s leading luxury goods groups, housing names like Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC Schaffhausen, and Montblanc.
The company is reassessing its holdings in underperforming brands, selling, for example, the Chinese luxury brand Shanghai Tang, which it owned for almost 20 years.
Outlook: The share has been trading in a steady uptrend. A major management overhaul saw Richemont test a new high at 13 500c/share in September this year. It did, however, experience a major pull-back in November 2015, which lasted eight months.
On the charts: Currently teetering on the lower slope of a smaller bull channel formed within its primary long-term bull channel, a recovery may be under way on upside through 12 015c/share. Richemont is a solid investment – it holds good brands in its portfolio with a strong cash flow and balance sheet. Go long: A buy signal would be triggered above 12 015c/share, with potential gains to either the 13 500c/share all-time high or the upper slope of the larger channel (grey bold slope).
A positive breakout of an inverted head-and-shoulders pattern would be confirmed on continued upside through that grey slope – with the target situated at 18 900c/share. Go short: Downside through 10 950c/share could see Richemont retest the lower slope of its larger bull channel, which would be breached below 8 550c/share. ■ firstname.lastname@example.org
Moxima Gama has been rated as one of the top five technical analysts in South Africa. She has been a technical analyst for 10 years, working for BJM, Noah Financial Innovation and for Standard Bank as part of the research team in the Treasury division of CIB.
A Vacheron Constantin luxury Swiss watch, a brand belonging to the Richemont group.