The market is fairly quiet these days. So I took the opportunity to zoom back to look at the long term view of our market. Taking a look at some monthly charts. To get a sense and remind myself of the market’s long term trend.
The top 40 index flirting with new highs
Lets take at a look of this week’s stocks in play
Looking at the long term picture of Absa. The stock tested the longer term trendline for the first time in about 16 years . And it took a global pandemic to get it there. Held firmly and bounce off the trendline for a much shorter time. Different markets of course, but still worth noting. The stock is now back above the 50 month EMA. If the market can get a monthly close above R150. Could be a start of a multi year bull run on Absa.
Prices to close attention to with a strong market memory R150, R171, R198 and R210 highs.
The Break above the 50 month EMA is also a break into the higher R140 – R200 a 45% Range. Nice range if one sit tight. If the stock can continue to run with a monthly close above R210 We could see the stock run as high as R264. completing a one bagger. Perhaps one of many you never know.
African Rainbow Minerals
The stock is back above its long term trend line. We could see the stock consolidating some more, perhaps forming an ascending triangle pattern. As it oscillate between the R304 highs and the trend line . If we can get a monthly close above R304
The swing low of the last few months held the base of the prior R81 -R218 range. As the stock makes a higher low. If the stock can take the R304 high . We could see the stock test R366. Above R366 who knows where the stock will end up at
Apsen looking really good. Already having have broken the neckline of the multi-year ascending triangle pattern. Also breaking the 50 month EMA while at it. Levels to watch out for is R250, R290, R319, R375, R438
Weekly chart view
Taking a closer look at the weekly chart
I’m anticipating some consolidation between R181 – R171. Depending on the chart pattern and how long the consolidation lasts. I could add to my position as the stock breaks back above R181 high with my stop below the low of that swing low. Otherwise, I’m going to wait for a break above R159 with a stop loss just below the low of the R181 support. Then wait again at the R217 station.
The stock looks nice with a healthy bull market. A weaker rand is another piece of wind behind the trade. The stock at the moment is knocking at the doors of the higher R486 – R598. If the stock can break and have a monthly close into the R486 box. We could see the run up to R598.
Beautiful falling wedge continuation pattern. The stock has started breaking the wedge’s resistance level. Looking well poised for a rise. Levels I’m watching closely R256 and R310
Nice inverse head and should pattern on Capitec. Which could see the stock run up to R2110, a nice 46% move.
The stock didn’t waste time moving into the R181 – R231 box. As the stock continues to make new highs. Price action on the daily looks quite positive as well
The stock began making new record highs this past week as the stock moved to a higher R291- R303 box. Even with the COVID-19 crash the stock maintained its long term trend line. When it was violated the 50 month EMA held up well as a second line of defence.
As a trend follower from time to time you bump into a stock that just takes off and never looks back. And are able to book a sizable profit on the trade from sitting tight. As Livermore put it quite rightly “Big money is made in the sitting, in sitting tight”. Such a stock has been Distell. The stock ran so much without ever touching my stop loss and I’ve been pyramiding into the position On the way up. Without ever risking more than 3% of my account balance. (My risk parameters started at 3% to currently 1%). My stop loss at the moment is R161.50 +122.46% since my first purchase. It wasn’t without good fortune of course. over nearly a year. The stock is nearing record highs now. Perhaps depending on how the Heineken deal goes, and results. The company reduces their debt by R1.2 billion during a pandemic. Would be interesting to see the results coming up on the 27th this month, and trading updates in the days leading up to the results. Noting the income earned from interest savings. On the daily chart the stock has been forming a nice cup and handle base. As the stock approaches new highs. The range has notably narrowed.
Strong results could be the catalyst that moves the stock decisively into the R180 – R286 box
The stock made a new high when the company announced a
chunky dividend. The stock looks like it’s attacking the highs again. With a massive head and shoulders pattern. Finishing the right shoulder with an ascending triangle. We could see the stock take a run.
The stock is looking like its invalidating the head and shoulders pattern that was forming. closing the week off with a nice bullish engulfing candle. Staying on the right side of the 50 month EMA. We could see the stock go and test the R73 levels
Waiting for a close above R57.63 the prior high close. Then add to my position with a stop stop loss around R54 just below the 50 EMA
The stock is approaching record highs. Looking quite bullish, rising steadily on the lower time frames weekly and daily chart. If the stock can take out the R72 high and start to leave it behind on the daily chart. We could see the stock really in for a run. We also just had a monthly golden cross.
The stock is breaking back above the head and shoulders pattern neckline after a nice doji candle. I’m excepting some reaction at the R63 level. As it seems to have quite a bit of recent memory. Key levels I’m looking at are R63, R70 and R74. Perhaps we will really start to see the stock run one it takes out the R74 high.
Kumba Iron Ore
The stock broke the R605 and didn’t look back. In fact the stock has been moving steadily into higher boxes for some time now. Started to knock at the door of the higher box. Monitoring the action on the daily chart.
The stock has started to break into new record prices only a points away from a new record high. I’m looking to build and run my position on the daily chart.
MTN started breaking into the R113 – R152 box on the back of results and the trading update on the fintech insurance deal. This could be the trigger of a multi year rally to around the R250 highs. Interesting levels R152, 182, and R244
What a phenomenal run the stock had the past year tripling from the March COVID-10 crash lows. Now back above the 200 month 200 EMA, still battling with the 50 month EMA. The stock looking well poised with momentum to run some more to at least the R300 highs
The stock has started to break from its building base. After holding the 200 month EMA on the back of the COVID-19 crash. R205 and R260 are levels of interest.
Account Summary on 15 August 2021
Capital invested: R10 303.77
Current Balance: R7 483.74 -27.37%
Current Equity (Balance including paper P&L): R14 538 +41.1%
Current P&L : +R7 054.26 +94%