Unum Capital: USDZAR Analysis + 3 Trading Opportunities

Unum Capital: USDZAR Analysis + 3 Trading Opportunities

Dear Trader

This morning’s analysis focuses on the US Dollar v the SA Rand. Let’s have a brief look and see which potential trading opportunities the outlook may offer.

As per the weekly chart view, the price has, for the second time since August 2018, rebounded off the breakout level following a two and a half year downward trend which saw the price decline from R17.76 to a low of R11.50. Following the prior week’s strong Rand appreciation, gains were reversed, reflecting price support near current levels and a potential resumption of US Dollar strength.

The monthly chart provides us with another perspective, reflecting the pair rebounding off the upper boundary of the bull channel and in line with the 50-month moving average. A look at the technical indicators sees the MACD having crossed over into long term bullish territory while the RSI is neutral but above the 50 level.

The resumption of US Dollar strength has seen the South African Rand give up it’s recent gains from from a high of R13.22 to the last close of R13.59. Seeking out potential trading opportunities, three shares that draw my attention are Growthpoint Properties, Rand Merchant Bank Holdings (both CFD trades) as well as Anheuser Busch Inbev which is considered an equity portfolio buy.

#1. Growthpoint Properties (GRT) – Short/Sell

Key Drivers:

– GRT has tracked the South African 10-Year Bond

– SA 10-Year Bond prices making a short term bearish reversal

– Bond Yields moving higher in the short term

– GRT retreating from overhead resistance

– Stochastic pointing lower

– Momentum indicator pointing lower

Trade Levels:

Short/Sell GRT above R25.50

Stop-loss: R26.50

Take Profit Target: R23.80

#2. Rand Merchant Bank Holdings (RMH) – Short/Sell

Key Drivers:

USDZAR is making a bullish reversal, which negatively impacts SA-focused financial stocks

– Pending break of incline price support

– Technical indicators: Stochastic, Relative Strength Index and Momentum Indicators turning negative

Trade Levels:

Short/Sell RMH above R81.20

Stop-loss: R83.90

Take Profit Target: R75.50

#3. Anhueser-Busch Inbev (ANH) – Equity Portfolio Idea

The global brewer has come under pressure due to concerns around it’s debt levels post it’s acquisition of SABMiller which has led the market to question the sustainability of it’s dividend. To a large extent, this is reflected in the company’s share price which has fallen from R1925 at the time of it’s inward listing to a dip below the R1000 during January 2019. At current levels, the company’s share price of it’s primary listing in Belgium appears to be commencing a steady medium term recovery however due to a recently strong South African Rand, the JSE-listed counter may not fully be reflective of this. At current levels, investors could consider ANH as a part of a medium term equity portfolio, suing the following levels:

Buy ANH above R1000

Stop-loss: R890

Take Profit Target: R1330

Please chat to the Unum Capital Trading Desk to take advantage of any trading opportunities.
All the best,
Lester Davids
Unum Trading Desk Analyst
e-mail: clientservices@unum.co.za
Tel: 011 384 2923

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