Lewis (LEW)

Wind at the back

Lewis offers a great risk:reward opportunity at the moment. After forming a long term base and breaking from it last month. The stock recently broke above the 50 month EMA. We could see the stock retrace back to the R39 support and is likely to hold it. With a long term stop loss of around R22 and a long term target of around R100 at these levels (R42-45) it’s a decent 1:4 risk reward ratio. The company performed very well coming on the other side of the pandemic quite strong. Paying chunky dividends and buying back shares as well.

Let’s zoom in to a weekly chart.

The stock is close to a weekly golden cross. The stock has been in an uptrend channel since the March 2020 lows. Ultimately breaking the long term resistance. The stock might find some resistance around R47. Then perhaps hold the R40-R47 range. I think the stock will really start to run above R47.

What’s been happening lately? Let’s zoom into the daily

It’s as if the box theory was built around the stock. The stock has been stacking the boxes like a pyramid. If the market violates the trend line. The stock could retrace back to the 50 day EMA around the R39 long term support. For now the status for Lewis is hold and/or wait for a break to a higher box above R43.

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