There is no doubt that this stock has had a stellar run since the June low but I’m not really sure what the rally was about. The stock is now starting to look a little stretched now near R34.00. Besides being on the expensive side, the chart is starting to look like a sell.
The stock has become over-bought rather quickly thanks to the recent rally. The rising price has taken the stock right back up to a rather strong resistance line that developed during that horrible May price plunge.
So what we are seeing now is a price that is over-bought at resistance…that is a sell signal.
Here’s the levels I’ve got in for my clients
Sell (short) DCP (CFD) 33.70/33.95
Stop loss 35.20
Profit target 30.10