Stocks in play 04 July 2021

Aspen Pharma

I got stopped during the recent sell off at the JSE ironically on the last day of the sell off. The stock violated the 50 day EMA for a couple of days. I got trigger back in the trade when the stock closed back above the support of the R161 – R167 box. My stop loss to start is just below the last swing low. At R155.10. I’m waiting for a close above R167 to add to the position. To start rebuilding this position.

If you look at the weekly chart. There’s still the cup and handle pattern to play out. The stock is still having a tough battle with the 200 week EMA. Perhaps a catalyst from the fundamental side could boost the trade. For now the trade remains a 1% bet.

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Bidcorp

Bidcord showed some strength in the face of a weak market. Almost as if it was saying, “Y’all can go to the floor, or stop moving. I’ll just continue to move up. I’ll take a break with a walk rather than stopping”. I like that in stock. If we can get a close through the R319 resistance. I will add to the position with a stop loss just below the current consolidation. Around R304.

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Coronation

The stock got hammered after paying a dividend. I tried to catch a falling knife. The market as usual every time we deviate from our rules slapped me in the face. I traded a reversal doji, instead of waiting for a breakout after being stopped as normal. Good thing, I never break my risk management rules (stop loss and position size). The slap was more to my wrist than face. Anyway, The stock seems to have found some support with the 200 day EMA. If we can get a close through R48.59 I will take the trade again. With a stop loss just below the recent swing low around R45.80

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Growthpoint

I’ll be honest I thought the President’s address would hurt the stock. Looks like the market has already priced in lockdowns and future lockdowns. Maybe the market sees value in the company. The stock is looking quite strong. Above R15 the stock has an open run way, the next significant support/resistance is around R21. If we get a close above the R15 resistance I will add to my position with a stop loss around R14.40

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Momentum Metro

We have a nice symmetrical triangle pattern on the stock. The support of the triangle has the 50 day EMA as a friend. If we can get a close above the evening star candle (R19.54) invalidating that short trade . I will start building my position with a stop loss just below the lows below the support of the triangle. Around R18.50

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BHP

Resources stocks have been hammered by the market. I suspect the Rand strength didn’t help them one bit. BHP looks like it has found some support around the 200 day EMA. It broke above the 50 day EMA. If we get a close through the R430 resistance. I will buy the stock with a stop loss just below the 200 day EMA around R405

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Impala Platinum

Impala broke, rested and held above the down trendline channel resistance. The stock has made a higher low this past week. I want to see the stock showing signs of making a higher high. With a close above the R250.90 resistance, ultimately closing above the 50 day EMA. R229 level looks a good place for a stop loss.

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Northam Platinum

We have a nice inverse Head and Shoulder pattern on the stock. With the head holding the 200 day EMA. If we can get a close through the 50 day EMA and the neckline at R231. I will start building my position with a stop loss just below the right shoulder around R211

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African Rainbow Minerals

The stock seems to have won the battle with the 200 day EMA. The R264 level previously held strong only as support. Is now providing resistance. If we can break this level with a close above R268.03. I will but the stock, with an initial stop loss around R248

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Royal Bafokeng Platinum

If the inverse Head and Shoulder pattern in the USDZAR chart plays out. That should be quite positive for the resources stocks. The stock is holding the 50 day EMA tight. I’m waiting for a break above R108.20 to add to my position with a stop loss around R99.50

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Mr Price

The gap has been filled. Not only was the gap closed, the 50 day EMA was held. There’s a good chance the stock will start to run from here. If we get a close above the R216.50 resistance I will jump back in the trade with a stop loss just below the recent swing low and the 50 day EMA around R202.

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Nedbank

We have a nice looking bullish flag on the stock. The stock held strong in the face of a weak market. Selling off only marginally, relatively speaking. If the stock break the bullish flag with a close above R171.30 I will add to the position with a stop loss just below the flag around R160.30

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Pepkor

This stock is displaying one of favorite characteristics of a winning trade. It broke and didn’t look back. It has now taken a breather. Which is not unexpected. If a can get a close above the R20.92 resistance, a high close we last saw January 2019. I will had to the position with a stop loss around 19.60

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Remgro

We had a nice kangaroo tail on the stock. I initially missed the trade when the next candle was a breakout candle. Breaking through the 50 day EMA and the R115 resistance. Fortunately the market was quite forgiving in this instance. Now I wait for a close above the close of the breakout candle as it formed a new resistance. A close above R116.37 with a stop loss just be just below the kangaroo tail around R111

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Sanlam

Looking at the weekly chart. We have a nice classic Cup and handle formation on the stock. The stock testing and holding above the 50 week EMA. Its having a tough time with the R64 neckline and the 200 week EMA for now. The handle has formed an inverse head and shoulder pattern.

Zooming to the daily chart.

Looking at the daily chart there’s quite some wind behind this trade. We have a combination of a golden cross, a pull back to the 50 day EMA that holds, inverse head and shoulders pattern, the right shoulder forming a falling wedge. Plus the cup and handle pattern from the weekly chart. I will start building my position on the break through the neckline close above R63 with a stop loss just below the right shoulder and falling wedge, around R60. I’m considering starting to build the position on the break of the falling wedge, but a half the risk. Starting the trade with a 0.5% risk and putting a full position on the break of the neckline and the close above the high close of the falling wedge at R64.90. Unless the break of the falling wedge also breaks the neckline in which can I will put on a a full position (1% risk)

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Sappi

The stock violated the R40.80 support and the 200 day EMA. But it has since found some strength. Breaking not only above the 200 day EMA but the downtrend line resistance as well holding above both going into the weekend. I’m looking for a close above R42.19 ultimately a close back above the 50 day EMA. With a stop loss just below the low of recent swing low and the 200 day EMA. around R36.40. I will building my position at the close through R42.19, R44.70 and R50.80 then I will bring back the boxes should the trade play out like that.

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Sasol

The stock looks like a dancer crouching before a jump. Flirting with the 50 day EMA and the R224 support/resistance. I’m simply just waiting for a close back above R224. I will jump back in the trade with a stop loss just below the recent swing low around R209- R199. I will build my position between R244, R240 and R150. Then re-asses future entry points.

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Standard bank

The buyers look like they’re back defending the price from further falling. At this point it’s unclear who’s winning. But what I can see is that sellers are either running out of steam or buyers are accumulating the stock. If the sellers take out the R124 low. There’s a good chance the stock will further to the R115 low. But with a close above the R128 and the 50 day EMA. It means the buyers have now taken the steering wheel. I’m waiting for a close above R128.82 to buy with a stop loss at R122.30. Building the position at R133, R139 and R143

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Transaction Capital

This is my second biggest winner at the moment behind distell. Currently sitting at 22.59% profit if my stop is hit. We had a nice bullish flag on the stock. I’m waiting for a close above R38.40 resistance to add to the position with a stop loss at R36.80. Moving my stop to R36.80 increase my profit to 28.7% meaning I will be putting on a 3% position.

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Account Summary on 2 March 2021

New Capital: R1303.77

Capital invested: 10303.77

Current Balance: R6583.7 -36%

Current Equity (Balance including paper P&L): R14636.35 +42%

Current P&L : R8052.65

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