Stocks in play 26 July 2021

JSE Top 40 index

J200 has been pretty much flat since February stuck between 59k – 63k. A great 5 months for long term index investors they had 5 months (and counting) of adding to their portfolios without moving the average buy by much. The index held both the 50 day EMA and the 200 day EMA. Showing the general market is quite healthy.

Absa ABG

Weekly analysis

Beautiful cup and handle pattern, as

the stock consolidates around the 200 week EMA. Staying on the right side of both 50 week and 200 week EMA. The 50 week EMA is only about 8% from a weekly golden cross. If the stock can break the downtrend line. We could see the stock run up to R205 (52%). Above R145 the odds are pretty strong.

Daily chart

There’s still a tug of war between buyers and sellers around the 50 day EMA. If we can get a close above R136.60 I will bet on the buyers to not only win the tug of war, but to break the R147 resistance and ultimately the downtrend line on the weekly chart. If the market takes out the R126 low, we could see the stock coming to test the R118 support. In which case I’m happy to wait and watch from the side lines. So when I build my position above R136.60 my stop loss will be just below the R126 low.

Amplats

Weekly chart

The stock held the R1514 support, also holding the 50 day EMA. We could see the stock run to R2240 (+30%) from current levels. There’s a Head & Shoulders breakout on USDZAR signal potential ZAR weakness coming. Doesn’t hurt that the company is a good dividend payer and the balance sheet is quite strong.

Daily chart

We have a nice inverse H&S pattern as the stock holds the 200 day and 50 day EMAs. If the stock can break the neckline. I will start building my position, with a stop loss just below 200 day EMA at R1582.

Aspen Pharmacare

Weekly chart.

Nice looking base chart pattern. The stock is holding above the 200 week EMA. If the market takes out the R177 (high since October 2018) we could see the stock run to R319 (+85% from current level).

Daily chart

I’ve been building my position since R163. If we can get a close above R172 I will add to my position with a stop loss around R163.

Astral Foods

Weekly chart

Nice bullish engulfing candle this past week. Engulfing the prior couple of weeks. Showing the strength of buyers. If the buyers can take out the R164 resistance and close through the 200 week EMA. We could see a run to R185 (+16% from current levels), and about 108% away from the 2018 highs.

Key levels to watch

  • R164
  • R202
  • R218
  • R275
  • R334

Daily chart

The stock has been moving nicely in an uptrend channel. If the market can take out the R165 resistance level. We could see a run to R201 level (about +25% from current level). I’ve been building my position since the 30th June 2021 breakout.

Sellers tried to push the price down on Friday, buyers defended the breakout. I’m now waiting to see if the market breaks the R165. If the Friday’s low is not taken out between now and then. I will place my stop just below the Friday doji.

Barloworld

Weekly chart

The stock came to retest the R101 Resistance/support also holding the 200 week EMA. The past week’s candle engulfed all of July candles. Buyers coming strong in the market.

Daily chart.

The stock had a nice breakout with the buyers seemingly winning the tug of war on the 50 day EMA. I will buying the stock at the market when the market opens on Monday 26 July 2021 with a stop loss at R97.40

BHP

Daily chart

The stock looks quite strong after bouncing off the 50 day EMA. Making a new high close since mid May. I pulled my stop loss to R417.40 reducing my risk on the trade to -0.88%. Next level I’m watching for the stock to cross is R490. I will continue to build my position in the R458 – R490 range, keeping my stop outside of that range.

Dischem

Daily chart.

At the moment there’s looks like the stock is held back either by a heavy seller or a week market. Buyers seem to be holding their ground on the stock. Forming a double bottom plus head and shoulders pattern. I think once the weight of a heavy seller or weak sideways market the stock could just quite quickly. Like a spring held back by a heavy object, once the weight is off the stock has an open run way

Bidvest

Weekly chart

To my mind nothing says bullish like a weekly chart golden cross. And the stock pulls back and still holds above both 50 week and 200 week EMAs. Bidvest is one such stock at the moment. The past week (ending 23 July 2021) we had a strong bullish engulfing candle, engulfing the prior 4 weeks.

Daily chart

We had a nice Friday breakout. I will start building my position on the stock at the open on Monday 26 July 2021. With a stop loss of R177 just below the recent swing low. I will further build my position between the R191 – R200 range keeping my stop loss outside of that range.

Richemont

Daily chart.

Nice strong move on the stock the past week. I got stopped on the trade and was triggered back in fairly quickly. The stock moved quickly into a new higher box. I pulled my stop to R170.75 reducing my risk to -0.61%. I will be adding to my position at market open on Monday 26 July 2021

Clicks

Daily chart

Nice inverse head and shoulders pattern on the stock. With the right shoulder much shallower than the left one. I’m waiting for a breakout from the R263 neckline. Then I will add to my position pull my stop loss to just below the right shoulder and the 50 day EMA at R252.

Distell

Daily chart

This is my largest holding in my portfolio, and my longest holding period trade so far. Been holding for 10 months now. The stock has been consolidating for a minute. Let’s see if the seller R172 has run out of stock to sell. Perhaps the president’s address on Monday seemingly will amongst many things be the announcement of sale of alcohol. Perhaps that would be the catalyst that moves the stock. If we get a close above the R172 resistance. I will pull my stop loss to R161 securing a bit more profit. The next level I will then be watching is R180. At that point we would be on new highs territory. And the stock has an open run way.

Glencore

Daily chart

We have a nice ascending triangle pattern on the stock. Waiting for a close above The R64.85 level. Then I will start building my position with a stop loss at R57.23

Mondi

Daily chart

The stock had a nice strong breakout on Friday (23 July 2021), after holding the 50 day EMA. I will be building my position with a stop loss just below the last swing low. At R375.50

Mr Price

Weekly chart

The price chart is looking very good at the moment. The stock held the support of the uptrend break from the head and shoulders pattern. Closing the past week with a strong bullish engulfing candle. A weekly golden is some strong wind at the back. Fundamentally the company survived(ing) the CODIV-19 crash.

Daily chart

The stock held the R212 resistance on Friday again. I’m waiting for a close above R212.33 Then I’ll jump back in the trade. With a stop loss just below the recent swing low, at R194.90.

Key levels I’m watching

  • R220
  • R231
  • R237

MTN

Weekly chart.

The stock broke against the downtrend line on the weekly chart. Breaking both the 50 & 200 week and EMAs.

Daily chart.

We had a gap and drive pattern on Friday breaking the resistance. I moved my stop to R100.40 (+3.95% risk on the trade) I will add to my position on at market open on Monday 26 July 2021

Key levels I’m watching

  • R108
  • R111

Nedbank

Daily chart.

The stock moved back into the R165 – R174 range, after holding the 50 day EMA. I’ll start building my position from the market open Monday 26 July 2021. With an initial stop loss at R156.42.

Nepirock

The stock held the 50 day EMA after the recent correction. The R101 level has held the whole week as resistance in a tight range. If we get a close through R101 I will add to my position and pull my stop loss to R98.30. Will add again if we break through R105.90

Pepkor

Weekly chart

Nice strong bullish engulfing candle on the stock. The stock broke out of the downtrend line. Staying on the right side of the 200 week EMA.

Key levels I’m watching

  • R20.90
  • R22.66
  • R25.63

Daily chart.

The stock held the R20.90 resistance level. After bouncing off the 50 day EMA. If we get a close through R20.90 I will add to my position with a stop loss just below the 50 day EMA at R18.92

Royal Bafokeng Platinum

Weekly chart

We have a nice bullish flag breakout on the stock. The past week (ending 23 July 2021) was a nice bullish engulfing candle with the low testing the flag’s resistance.

Daily Chart

I’m waiting for a close above R108, then I will start building my position with a stop loss at around R98.

Truworths

Weekly chart

The stock broke the downtrend line and just ran. The pas week close was a nice bullish engulfing candle after the stock held above the 200 week EMA.

Key levels I’m watching

  • R66
  • R75
  • R92
  • R110

Daily chart

If we get a close above R60.85 I will add to my position pulling my stop loss to R56

Account Summary on 2 March 2021

Capital invested: R10 303.77

Current Balance: R7 382.17 -28.35%

Current Equity (Balance including paper P&L): R13 433.57 +30.38%

Current P&L : +R6 051.4

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