JSE Equities: Redefine Properties, Discovery Holdings, Kumba Iron Ore, Massmart Holdings
Redefine Properties (RDF)
Previous Short, Now Potential Long Reversal Upon Trigger | RDF one of the recent short ideas, with the bear flag technical formation continuing to develop. The price is however nearing the recent lows, which may trigger interest and a potential breach of the bear channel. In addition, Friday’s increase in volume is also of interest. Provisionally, traders should monitor 178c – 168c as a potential accumulation zone. SL: 144. Target: Open.
Discovery Holdings DSY
DSY is one of the names we strongly recommended at the 18 – 19 March lows, in which we argued that “Red Equals Opportunity, 18 March 2020′. From 7200c at the time, to 9772 at it’s last close, the share is now approaching three levels of interest: (1) prior breakdown level (2) downward trend line resistance (3) 0.618% Fibonacci retracement. In addition, the share is approaching the ’round number’ R100 which is often a psychological price target. Also keep in mind a push into the downward trend line and failure for the opportunity to potentially get short.
Kumba Iron Ore (KIO)
On Friday, KIO printed an inverted hammer candle formation, having traded into the underside of it’s declining 200-day simple moving average. Of interest is the 1-day volume increase despite – tis despite the fact that it was a UK bank holiday (offshore being responsible for a large portion of our volumes traded). The RSI is strong however is becoming moderately overbought with a 60 print. In addition, the RSI is printing a slightly lower level that the prior swing high. Currently (last close) at 36333c, the 37600c-37900c range should monitored as a potential distribution zone.
The share may possibly be developing a short term base here. After peaking at 6200c in February, last week saw a low of 2214c being printed. Currently, both the RSI and MACD signal a potential reversal of trend, with Friday (+6.19%) seeing the 3rd highs volume day since 23 March. In addition to the RSI signal bullish divergence, we are also seeing the indicator break out of it’s downward trend (ahead of the price). Pivot/action levels for the share are above 2520c and 2560c. This will put the stock above it’s 8-day EMA. Provisionally, traders should look to purchase through 2575c, with upside targets of 2811c and 2955c. Stop: 2215c.
Trading Desk Analyst
Unum Capital (Pty) Ltd
An Authorised Financial Services Provider (FSP 564)