Research Note: USDZAR, GBPZAR, Barloworld, Richemont, General Retail Index (J537), SHP

Research Note: USDZAR, GBPZAR, Barloworld, Richemont, General Retail Index (J537), SHP

USDZAR: Following a seemingly ‘dovish’ Federal Reserve, the pair has made a back-test of the bull channel breakout level. The 50-day moving average has started to turn up while the 200-day moving average at 14.09 could act as a ‘first support’. A look at the lower time frame (4-hour chart) reveals a triple top formation that has broken to the downside as well as where the incline has been breached. Here is back-test is possible with a continuation of the move lower – in the short term.

Daily chart:

4-hr chart:

GBPZAR (Update): The price has retraced to our initial target of R18.70. For now, 18.40 – 18.50 appears to be the next accumulation zone, which is just above the rising 50-day moving average. On the upside, the resistance levels are R19.10 and R19.30.

Barloworld: The price action and short term trading range for BAW has provided an opportunity to play both the long and short side although the long side is preferred as the bigger picture (higher time frame remains fairly bullish). A look at the ‘Money Flow Index’ may suggest that ultra short term bias may be to the downside, with the price continuing to trade below the downward trend line in place since the peak of 26-February. This sets up an opportunity to take another buy long position where the exact support level is 11788c however I would look to a price of 11870c (and below) as a starting point for an accumulation zone/level of interest. Alternatively, should we see the price make a break to the upside, any overbought conditions could possibly be used as a short/sell opportunity however here the levels are yet to be confirmed. Please see chart for potential buy/long scenario.

Richemont: The share price, from a technical standpoint, is forming a bearish flag formation. In addtion, ultra short term selling pressure has been on the rise although the price remains above the short term moving averages. Preferred buying levels are below 9800c, alternatively a push back above 10800c starts to set up another short term short/sell opportunity.

General Retail Index: The previously highlighted head and shoulder formation on the weekly chart has broken below neckline support. Eskom > Retail Sales > Mall Exodus. Note: SHP nearing ultra short term support. (SHP Chart, around 15620?)

Capitec: Shares at all time hghs however bearish signals are starting to become visible: Money flow decelerating (with bearish divergence).

What I’m reading:

1. Tencent to cut reliance on China gaming after profit hit
2. Japan’s slowing inflation leaves BOJ fighting tough price battle
3. U.S. Didn’t Import Venezuelan Oil Last Week—For The First Time Ever 

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