Stock update -

Standard Bank;

The share is attempting to breach a 10-month bear channel as the price persistently tests the downward trend line resistance. Last week we saw the Rand under pressure however the share remained unshaken. With the US having closed in negative territory on Friday as well as yesterday, we may see some risk aversion on SA markets as traders square positions ahead of the Christmas break. For now, the share remains range-bound with resistance at 180/182 and support at 163.92. Pro: the 50-day sma is starting to stabilize and flatten out. Con: A close below 163.60 could see a continuation of the downward channel.

For short term traders, accumulation and distribution level are as follows: Acc: 16392c. Dist: 17385c

For medium term traders, accumulation and distribution level are as follows: Acc: 15642c. Dist: above 18100c.

 

Rand Merchant Banks – RMB;

Has formed a double top after finding resistance at the upper boundary of the sideways to downward channel that has been in place since February 2018. From a risk-to-reward perspective, the 7158c level (LOI #2) could be considered as a buying opportunity while 8200c is considered a distribution zone. Pro: The price is currently being supported by it’s 50-day sma which is starting to turn up however at the simultaneously being capped by it’s 200-day sma

 

Short Pick’n Pay;

The recent candle structure/formation suggests continual selling pressure, with the last close just above the incline support going back to 17 October and just below the 200-day sma. A break below the incline support would could see the first primary level of support at 67.12 being tested while a test of a secondary level of support at 6480c down to 6415c presents a much more compelling buying opportunity from a risk/reward perspective. Alternatively, should we see a rally from currently levels, the 7500c is viewed as a distribution zone and thus a potential short/sell level.

 

For more offshore trade ideas, please contact the Unum Capital Trading Desk on 011 384 2923 or e-mail tradingdesk@unum.co.za

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