This morning’s analysis focuses on the Rand versus the US Dollar as well as the JSE Top 40 Index. We also provide an update on a few recent trade ideas and take a look where the next potential opportunities lie.
US Dollar / South African Rand (USDZAR)
Daily Chart View: Month-to-date, the pair has advanced strongly, from a low of 13.22 to the Thursday’s high of 14.27. The current trading level is just below the overhead trend line resistance of the sideways sloping channel that has been in place since August 2018 while the price has also temporarily regained it’s 50 and 200-day moving averages. The next resistance levels are 14.28, which is the top of the channel/trend line resistance while support is at approximately 13.97 and 13.86.
Daily Chart View: At current levels, the index is starting to trade near an overbought territory, with a technical ‘megaphone’ formation that reflects indecision between buyers and seller as well as an increase in volatility as judged by the increasingly wider daily trading ranges. On Thursday 14-February, the intraday high was just below the downward trending 200-day moving average as well as below the prior support which may now turn to resistance. The last reading on the technical indicators reflect the following: Momentum pointing up while the RSI is trading sideways.
#1. Clicks Group: The recent price action for retailer Clicks suggests that it still maintains it’s favour among a wide base of local and global investors. While the long term technical setup is one which we could debate, the short term price setup may offer an opportunity for traders to play a potential post bookbuild bounce. Over the last three weeks, the price has declined from R194 is approaching horizontal support near the ~ 168 level while the RSI is approaching oversold while the Stochastic is trading in an accumulation zone. The provisional trade levels are as follows:
Buy CLS R168 (or better)
Stop-loss: R163 (or 2% trailing)
Take Profit Target: R185
– mobile telephony;
– fixed telephony and cable services: local and long distance telephony services. The group also offers broadband Internet access, e-mail, and satellite television.
Net sales break down by source of income between sales of services (90.7%), and sales of equipment (9.3%).
Net sales are distributed geographically as follows: the United States (93.3%), Brazil (1.8%), Mexico (1.8%), and other (3.1%).
At current levels, the share has attractive fundamental metrics (PE 8.6x, DY 6.85%) and offers a medium term opportunity to play the upside.
Technically, the price is breaking the short term downward trend, is regaining it’s 50-day moving average while the Momentum and RSI indicators suggest a further advance is at hand.
Buy AT&T at current levels $30.47
Take Profit Target: $39.00 (Medium Term)