EOH, Richemont

Finweek English Edition - - Contents -

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. ■ ed­i­to­rial@fin­week.co.za

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.

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