Killer Trade: Telkom, TFG
telkom, the semiprivatised information and communications technology (ICT) services provider, has over 3.5m telephone access lines and over 1m internet ports servicing business, residential and payphone customers. Telkom is 39% state-owned and currently operates in more than 38 countries across the African continent. Telkom’s share price excelled from 2013, when current CEO Sipho Maseko was appointed, after revisiting a prior low at 1 130c/share, and tested a high at 8 580c/share in 2015. In 2013,Telkom also disposed of its 50% stake in Vodacom. Upon arrival, Maseko implemented an intensive, well-anticipated turnaround plan aimed at cutting R1bn in costs per year. Outlook: After forming a lower top at 8 250c/share in May 2017, Telkom lost some of its gains towards support at 4 160c/share, as the tech and telecom sector struggled in current economic conditions.
On the charts: Currently rangebound between 4 160c and 5 825c/share, Telkom is trading in a symmetrical triangle.
Go long: A move above 5 825c/ share would confirm a positive breakout of the triangle – thus triggering a buy signal.The shortto medium-term target of this pattern breakout would be at 7 815c/share. Signs of a bullish breakout would be pending if the three-week relative-strength index (3W RSI) continues to trade above the upper slope of its own triangle in November. Positions could be increased above 6 885c/share.
Go short: A negative breakout of the triangle would be confirmed below 4 600c/share, with the downside target situated at 2 610c/share. ■