“The bigger the base, the higher the space”
– these are words that are often quoted by traders and investors who monitor the charts for trading opportunities of shares that have been depressed and appear ready make sharp moves on the upside and which may trend for an extended period of time.
Today, one such JSE share is Resilient REIT Ltd, the property company which has seen it’s share price depressed over the last 14 months and which at current levels is looking to break out of a trading range that has been in place for the past 12 months.
Since late January 2019, the price has traded in a sideways channel which appears to form part of a larger bull flag formation.
– For short term traders, a range of 691c exists, with 5799 as support (buy) and 6490c and resistance (sell). Within this parameter, a stop-loss of 5620c can be applied.
– Traders who wish to benefit from a potentially longer trend (medium term view), could look to buy a breakout of the bull flag, with a take profit target of 6910c followed by 7233c, and applying a stop-loss of 6180c.
In addition to the trading opportunities present above, Kap Industrial Holdings and Barloworld offer short term trading ranges off which to profit.
Kap Industrial Holdings (KAP): The price has declined from 900c since the beginning of February and has formed a falling wedge/channel which has seen the price trade near horizontal support. Should we see sub-750 being tested, traders could use the opportunity to accumulate the share, for a potential ‘buy-the-dip’ and reversal.
Buy KAP below 750c
Take Profit Target: 820c
Re-visiting Barloworld: Recently, Unum Capital clients who participated in the trade benefited from the sharp run-up in the share with the price which made an explosive move from 11803c to 13536c – a 14.6% appreciation over three trading sessions. While the same result may not be achieved, I believe a short term range still exists between sub-12250c (buy) and 12900c (sell). Here a stop-loss of 11990c (or 2% trailing) can be applied.
Please chat to the Unum Capital Trading Desk to take advantage of any trading opportunities.
All the best,
Unum Trading Desk Analyst
Tel: 011 384 2923