50% off your brokerage if you trade any of these 5 ideas.
Get ‘In The Black” This Friday
Happy Friday Trader!
…or as it is known today “Black Friday” – the informal name for the day following thanksgiving Day in the United States, which is also regarded as the beginning of the country’s Christmas shopping season. Over the last few years, retailers in South Africa have also adopted the tradition of offering massive discounts to consumers in line with the American custom. While there may be some great discounts offered by our local retailers, I am sure that we could find some “bargains” on the market too, right?
Let’s have a look at 5 opportunities that traders could capitalize on:
#1. Equities | Bid Corporation (BID) – Cheaper Than Last Week
Multinational Food services giant Bid Corp has seen it’s share price retreat from the top of an upward sloping channel that has been in place for 13-months. The price is now looking to test the lower boundary of the channel/trend line support which is a level at which traders could look to accumulate in anticipation of a short term rebound.
Buy BID between 32000c/32200c
Use a stop-loss of 31200c to protect capital
Take Profit at or near 33800c
**(Alternatively you may replace BID with a share of your choice – local or offshore)**
#2. Indices (via an ETF) | iShares MSCI United Kingdom ETF (EWU)
Compared to global equities, the UK is trading at a discount. This can be expected considering the political and economic uncertainty as concerns over ‘Brexit’ remain. To give you an idea of where assets are priced, we compare them to the iShares S&P500 Core ETF (which makes up a substantial portion of the global equities market) as well as the MSCI World (URTH). To make this comparison, two basic fundamental metrics will be used:
iShares MSCI UK 15.2x
iShares S&P500 Core 22.4x
iShares MSCI World 19.5x
iShares MSCI UK 1.69x
iShares S&P500 Core 3.4x
iShares MSCI World 2.5x
From the above data, we note that:
– On a Price/Earnings Ratio basis, UK equities trade at a 22% discount to the MSCI World and a 32% discount to the iShares MSCI S&P500 Core.
– On a Price/Book Ratio basis, UK equities trade at a 32% discount to the MSCI World and a 50% discount to the iShares MSCI S&P500 Core.
Buy EWU ETF at current levels ($33.19)
Use a stop-loss of $30.30 to protect capital
Take profit at or near: $37.50
#3. Commodities | Natural Gas
Technically, Natural Gas has been setting up well for upside momentum. The higher lows as per the candle chart suggest that buyers have become increasingly interested on pullbacks. the 50-day moving average is turning up while the 200-day is starting to act as a support. In addition, the 50-day moving average is crossing back above the 200-day moving average resulting in a ‘golden cross’ technical formation. Traders could look to participate in further upside by purchasing UGAZ, which is the VelocityShares 3x Long Natural Gas ETF.
Buy UGAZ below $10.50
Use a stop-loss of 8.00 to protect capital
Take profit at or near $14.00
#4. FX | USDJPY
If further signals arise that a short term risk-off environment may emerge, it would be useful to keep the US Dollar / Japanese Yen pair in mind to take advantage of the environment. The Yen is typically seen as a safe-haven and benefits when risk-off takes hold. Technically, the price is trading at it’s downward trend line resistance as well as the 61.8% Fibonacci retracement level. Currently printing 109.47, traders could look to short using a stop-loss of 110.45 to protect capital with a take profit target near 107.60.
#5. Cryptocurrencies | XRP Ripple
Cryptocurrencies have been on an epic slide, with prices languishing near multi-month lows. Ripple (XRP), which has seen it’s price decline from $0.50 in June to a recent low of $0.20, is looking to bounce as the candle tails suggest buying activity following the slump. At current levels, traders could look to take possibly take a short term ‘punt’ in anticipation of a rebound.
Buy XRP at current levels 0.22
Use a stop-loss of 0.17 to protect capital
Take Profit at or near 0.28
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