Unum Capital: Trading Desk Note + Remgro & Telkom

Unum Capital: Trading Desk Note + Remgro & Telkom

Unum Capital: Trading Desk Note + Remgro & Telkom
Dear Trader
On Wednesday, the All Share Index closed lower by 0.53% to 55231, lead by declines in Sasol (-12.99%), Redefine (-6.70%) and Glencore (-3.28%). On the upside Assore, Clicks and Mondi added 3.24%, 3.82% and 2.61% respectively. This morning the Rand trades at R14.39 versus the US Dollar while Brent Crude is ldown by a 0.54% to $70.49 and Gold Futures trade at $1272. Today at 3pm (SA Time), the SA Reserve Bank’s MPC is expected to announce it’s decision on interest rates.
U.S. stocks fell for the third time in four sessions Wednesday, dragged down by makers of semiconductors after a U.S. federal judge ruled that Qualcomm illegally suppressed competition for cellphone chips.
Shifts in U.S.-China trade relations have swung stocks in both directions in recent weeks, with signs of easing tensions boosting risk assets and fears of an extended tariff fight hurting them. Chip makers reliant on trade flows and Chinese demand have been among the most volatile stocks, with the PHLX Semiconductor Index dropping 14% so far this month following a 35% rise in the first four months of 2019. It shed 2.1% Wednesday.
The Dow Jones Industrial Average fell 100.72 points, or 0.4%, to 25776.61. The S&P 500 declined 8.09 points, or 0.3%, to 2856.27. The broad equity gauge is up 14% for the year and 3% below its April 30 record. The tech-laden Nasdaq Composite slipped 34.88 points, or 0.4%, to 7750.84.
Energy stocks also fell alongside oil prices Wednesday after government data showed a surprising increase in crude stockpiles last week. The S&P 500 energy sector shed 1.6%.
Fed Policymakers Pledge to Remain Patient on Rates

Fed officials agreed that a patient approach to monetary policy would likely remain appropriate for some time even if global conditions continue to improve, amid moderate economic growth and muted inflation pressures, minutes of the May meeting showed. The Committee also noted that it is prepared to adjust the size and composition of the balance sheet to achieve its macroeconomic objectives. – TradingEconomics.com

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Technical Trade Ideas
Remgro: The share has retreated toward the lower boundary of a channel formation that has been in palce since June 2018, presenting a technical buy/long opportunity for short term traders. At it’s last reporting period, the company stated that it’s Instrinsic Net Asset Value per share was R230.23 which at the last close of 18307c represents a 20% discount. I am looking at a print below 17800c as an accumulation zone (with a secondary accumulation zone below 17650c, using a stop-loss of 17350c and a take profit target of 19180c.
Telkom: An analysis of the chart sees and review of selected technical indicators suggest that the Telkom share price may be ready to make a short term bearish reversal. Here’s what I see: as per the daily chart, the MACD has made a bearish crossover, the Relative Strength Index turning lower and hovering just above the 50 level. As per the weekly chart: the Money Flow Index is at the lowest level since October 2018 (even though the share price trades at a two-year high). Pending MACD bearish crossover. At current levels, traders may want to position themselves to take advantage of a potential downside move in the share price, going short on a break below 8240c, using a stop-loss of 8600c and take profit target of 7660c.

Making Headlines
– U.S. eases curbs on Huawei; founder says clampdown underestimates Chinese firm
The United States has temporarily eased trade restrictions on China’s Huawei to minimize disruption for its customers, a move the founder of the world’s largest telecoms equipment maker said meant little because it was already prepared for U.S. action. The U.S. Commerce Department blocked Huawei Technologies Co Ltd from buying U.S. goods last week, a major escalation in the trade war between the world’s two top economies, saying the firm was involved in activities contrary to national security. Reuters
General Motors Co faces pushback over its request that U.S. regulators waive some automobile safety standards to make it possible to deploy a ride-sharing fleet of driverless cars without steering wheels or other human controls.
GM first made the request for a two-year temporary waiver on features like mirrors, dashboard warning lights and turn signals designed for a human driver in a petition filed with the National Highway Traffic Safety Administration (NHTSA) in January 2018.
The largest U.S. automaker said it hoped to deploy no more than 2,500 modified Chevrolet Bolt electric vehicles as part of a controlled on-demand ride-sharing fleet, likely to be based in San Francisco, by the end of 2019. Reuters

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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