Stocks in play 7 February 2022

PGMs starting look like the lows are behind us. Iron Ore breaking out a head and shoulders pattern. Oil joining in on the party. Resources stocks are the ones to watch over the next few weeks.

Banks and Financials

Absa

Banks continued to look positive. Absa saw a bit of a bull back. I’m expecting the market to break through R173 to enter the higher box. Then I will raise my stop loss to R186, and add to the position. If I wasn’t in already I was going to monitor and enter at the break of R170

Discovery

The stock hasn’t looked back since breaking from the symmetrical triangle pattern. The stock made new 52 week highs breaking right through R155. A price we last December 2020. I added to my position in the past week. Now I’m waiting for a close through R166 to add to the position

Investec

I have a fairly substantial position is the stock weighting 16% of my portfolio. My risk on the trade is a +22.64% profit. The stock is breezing through the higher box. I raised my stop R81.93 just below the 50 day EMA. I will be monitoring the price action in the box, for higher stops and opportunities to add to the position. But if it runs R99.50 without stopping, I will add to the position.

Nedbank

The rate hike helped Nedbank to break the R186.60 resistance. As the stock comes back above the 200 week EMA. Waiting for the stock to move into a higher box. But I will monitor price action on the current box for opportunities to raise my and add to my position.

Resources

African Rainbow Mineral.

We have a bullish flag, the stock still battling with the weight of the 50 & 200 day EMAs. PGMs are starting to come back into play. If the stock can break the back above the 200 day EMA. I’m putting it on a buy. Monitoring the R250 resistance, if the market takes out this level. It’s all systems go for the R304 target.

Amplats

The stock has been an up-trend channel, backed by a golden cross. With the 50 day EMA servicing as trendline support. I’m waiting for a close through R1971.75. I will then raise my stop loss to R1770.45.

DRD Gold

We have a double bottom on the weekly chart. Holding the 200 week EMA. Looks like sellers are running out of stock or DRD got cheap. If the stock can break R15, I think we set for the R17 highs.

Kumba

Iron ore prices have been surging. Breaking out a Head and Shoulders pattern.

Kumba is well positioned for to profit from this rally. It bottomed out in November last year. Now back above the 200 day EMA, hasn’t looked back since.

Sasol

There is some great wind at the back of this Sasol trade. Oil prices have been surging, Sasol is only one of the only plays in town. On the oil trade. The stock fitted with entering the higher box, breaking the R350 old support . If the market breaks back to the higher box, I will raise my stop loss and add to the position

Telecoms

MTN

This stock is my biggest position, nearly a third of my portfolio. More than half my profit comes from this trade. With risk being a 61.19% profit, it’s a comfortable hold. The stock gapped up about 5% last week, it’s been making higher lows. If the stock breaks below the up-trend line in an attempt to close the gap, I expect the R175 old resistance to hold support . For now I think we’re going to see an ascending triangle as the stock rectacts to R200. With oil being a strong bull market. I think MTN will eventually break R200. At which point I will add to the position.

Telkom

Telkom has been a tough hold. I’ve been stopped quite a few times. Problem is the deep draw down. The stock is now back above the 50 day EMA after testing the 200 day. I will build a position in the stock with an initial stop loss at R46.20. Putting on a 1% risk with 20.7 shares

Others

British American Tobacco

The stock broke the R667 resistance I was waiting for. I raised my stop loss to R624.44. Raising my position to a +0.5% profit. I will add another 1% risk to the position with 1.7 Shares on Monday’s open. Now waiting to see how the R708.75 reacts. If the market break that level. I think we set for the R959 highs

Bidcorp

The stock finally broke the R335 resistance. The stock last closed above this resistance in February 2020. It came back to retest it from above and held. I started building a position on the stock. Now waiting for a close through R354 to raise my stop loss.

Shoprite

A strong update last week, the market loved the update stock gapped straight into the higher box. While it’s peers are having a tough time, the stocks are making lower lows. Waiting to see how the market will treat the R233 resistance. Because last time we were here the stock more than halved. Took roughly two years to recover from the fall. There may be a lot of stale bulls happy to finally break even. I expect the stock to react and hold R233 before continuing to break higher. Then I will add again to the position