The R193 – R210 areas had been a strong area in the market’s memory. The company put a strong trading update showing a strong recovery from the lockdown regulations the past year. The market loved the update. The stock continued making new relative highs. Showing tail lights to both 200 day & 50 day EMAs. Fair bit of room to the R280 highs. The odds are quite good for the market to take us there if the stock can close through R193-R210
We’re well ahead of the pre-COVID-19 levels. The stock slipped below R181 January 2019, tried its luck in May 2019 but failed. It continued to make lower lows and lower highs. Till the start of the COVID-19. Ironically Shoprite price was amongst the least beat up because it was already beaten by the market leading up to the pandemic.
The market never came close to this price until recently. The market remembered that price I suppose plenty of hoggers from 2019 are happy to break even. If the market makes a new high close above R181.86. It’s time to buy the stock again. For now it’s holding or wait for the break above R181.86
Wind at the back
We’ve seen companies that were least beaten by the pandemic coming the other side of the pandemic stronger. Buying out the ones that are still bruised. Such being the case with Shoprite. The company came out with a sens announcement that they’re in agreement with Massmart to purchase some of Massmart’s subsidiaries. Subject to the competition’s commission approval of course. Most of these stores will most likely be rebranded to Shoprite and Usave. We could see Shoprite also moving into the Bulk buying cash and carry market with the acquisition of some Massmarts assets.
The stock is back above the 50 month EMA, and has broken long term down trends.