Unum Capital: USDZAR, JSE Top 40 Index and Trade Updates

Unum Capital: USDZAR, JSE Top 40 Index and Trade Updates

Dear Trader

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.

Monthly Chart View: The longer time frame shows the price having found support and rebounding off the trend line, which was also previously a resistance level. The technical indicators (MACD, RSI and Stochastic) reflect a medium term bullish trend while the Momentum indicator is neutral. A monthly close above the 14.55 level may accelerate a further longer term price advance.
JSE Top 40 Index (Spot)

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.
Trade Idea Updates: 
Profit Makers
1. Sanlam Ltd (Short)- https://goo.gl/pUvYUf
2. Richemont (Long) – https://goo.gl/Ahzr1k
3. Home Depot (Offshore, USA) (Long) – https://goo.gl/PyLXh7
4. RMB Holdings (Short, Approaching target, 75%) – https://goo.gl/NxGsVn
Profit Takers
5. Nedbank Group (Short)- https://goo.gl/DemKUF
6. Anglo American plc (Short) – https://goo.gl/8h6AP4
Potential Trading Opportunities
Today, I have on my radar potential trading opportunities in Clicks Group, the JSE Limited as well as an offshore share, that being telecommunications services provider AT&T.

#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

#2. JSE Group Ltd
While the JSE itself has been trending higher, shares of the JSE Group Ltd have given back some of it’s recent gains. The share is approaching support and I am looking another opportunity on the long side. Support is around the R146 level while the RSI and Stochastic indicators suggest the price is becoming temporarily oversold. These are the provisional trading levels:
Buy JSE below 146.50
Stop-loss: R141.00 (or 2% trailing)
Take Profit Target: R160.00
#3. AT & T (Offshore):
AT&T is one of the leading American telecommunication operators. The activity is organized mainly around two areas:

– 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.

Trade levels:

Buy AT&T at current levels $30.47

Stop-loss: $28.00

Take Profit Target: $39.00 (Medium Term)

Please chat to the Unum Capital Trading Desk to take advantage of any trading opportunities. 
All the best,
Lester Davids
Unum Trading Desk Analyst
Tel: 011 384 2923

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