A variety of negative factors has driven South African-focused equities down to multi-week lows. In particular, banks and retailers have been under pressure as concerns over economic growth (partly due to Eskom) have lead to fears of a downgrade while the pre-election jitters has seen selling pressure overwhelm buyers.
Shoprite (SHP), which has also come under pressure due to company-specific hurdles, trades near an 11-day swing low, while the technical indicators suggest the share becoming oversold in process. The downward ‘momentum’ is slowing while the RSI (Relative Strength Index) and Stochastic is starting to turn up as per the daily chart below.
At the current level of 15380c (or lower on an intraday basis) the risk-to-reward appears favorable for a short term rebound.
These are the trading levels:
Buy SHP at current levels 15380c (or better)
Take Profit Target: 16600c (close to the 50-day moving average)
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