LeighRiley

Trade Idea on JSE Ltd this morning coincidentally... The strength in the Rand has helped finance and retail counters rebound somewhat. The JSE with its ability to facilitate execution is in a strong short term position to take advantage of any (outward?) flow. Technically we have seen the share price rebound strongly after a a steep decline, now having formed an inverse head and shoulders pattern; normally a signal of a reversal in a bearish downward trend. A break above the confluence of the diagonal and horizontal support at the right hand shoulder of the pattern, which technicians would term as the neckline, would signal a confirmation of the upward break. A target of 15100c is expected and this is normally assumed as the height of the head to the neckline, projected upward from the right shoulder, all though this is not an exact science. An increase in volume should accompany the breakout for confirmation and traders may see it as a little concerning, given that it has fallen off on the rally. A failure for the current setup would be considered with a close below the right hand shoulder of the pattern at 13359c. The risk to reward ratio of this trade setup constitutes a little more than 1: 2 with a downside of 3.8% and upside of 8.9%

It unbundled the Bidcorp part of the business so the share price revalues relative to its business constituents.

Retailers are an interesting play given that we should start seeing inflation pulling back in the next few months with the uptick in farming following the drought. Some basic food producers like Pioneer present an interesting investment opportunity and I would be looking for an entry closer to 15000c or at least under 16000c. Tiger Brands has been on a tare and the momentum is strong, I would be waiting on a pullback to around 40000c. Be cautious of producers who will see a negative impact from the sugar tax like Rhodes Food group, all though I like the Rand hedge it offers and at 2400c I may be a buyer. Financials; I like the PSG, Peregrine and other mor diversified financial oportunities as I believe they provide a better defensive play against any political risks that may effect both banks and retailers with a devalation in the Rand. The above are all on my radar. I own: Woolworths Coronation Bidvest Consolidated Infrastructure Brait Life Healthcare ArcellorMittal Impala Platinum Holdings Steinhoff Intl Some value, some growth, some speculative, which I add to monthly or quarterly. I balance the pure play on equities with trying to maximize my tax through forced savings via an RA, reducing liability and given the uptick to 35% for the tax free saver I will further try and reduce my liability and kicker here by adding as much as I can. Just a thought.

Cant understand the move on that stock yesterday. Traders on our desks are all looking puzzled. Could be a nice short if it dips below 15

[align=justify]We are expecting a half year earnings release from Billiton on the 21st of this month. 2016’s full year results were dismal; with the group reporting a first time attributable loss, cutting the dividend by 77%. The Samarco dam disaster was a blemish on the income statement, resulting in a $2.2bn after tax loss. Given the groups exposure to a range of commodities, in particular that of petroleum, iron ore and copper (collectively contributing over 60% of the groups revenue) with the subsequent weakness these products experienced up until a rebound in their prices through the second half of last year, we could see an improved set of half year results. Despite the poor full year results for 2016 the share price still managed to climb over 68% from the eight year lows last seen in November of 2008. Currently the share price looks to be consolidating with the recent pullback coming on the back of lower volume. The oscillator denotes a move out of oversold territory and back into a neutral area, denoting a pick up in momentum. The price action is line with what technicians would consider a bullish flag formation with a bias to the upside after an extended upward trend. Aggressive buyers will be looking to get in closer to around the horizontal support at 22300c with a potential stop loss just below 21558c. A confirmation of the bullish move would be considered with a close of the share price above the diagonal resistance line at 23170c. The upside targets for the breakout would be considered at 24400c and 25500c in extension.[/align]

Gold prices have pulled back after the US Dollar rose ahead of the Fed’s Janet Yellen’s appearance before congress today. The concern is that the Fed will maintain its rhetoric around three rate hikes this year, making a non-interest bearing asset such as precious metals less attractive for long term holders. The strong move in equities yesterday evening in the US has since served to dampen the dollar move but added to the angst of those holding the shiny stuff as a “risk-on” sentiment caused further selling. Technically speaking; Gold has reversed the previous short-term downward trend, having formed a double bottom; indicative of the price having moved from making consecutively lower lows to make a higher low. The upward trend is now in place over the medium term and the current price action movement is forming a bullish consolidation. Horizontal support is currently in place at $1219. The price of the commodity is compressing as it consolidates, with potential buyers looking for a break above the diagonal resistance line as a sign of the bullish move with an initial upside target of $1245 and $1260 in extension. A failure for the current buy setup would be considered with a close below $1219.

Thanks for the welcome, looking forward to sharing more insights.

A look at the USDCHF on the hourly chart and it is evident that the USD has been off on a tare since the beginning of February with a strong upward trend denoted in blue below. The currency pair looks to have formed a double top; normally seen by technicians as a bearish reversal signal in an upward trend, wherein the price of the instrument fails to make a consecutively higher high. It is also interesting to note the Stochastic Oscillator dropping as the momentum of the buyers is seeming to wane. The signal for the reversal would be confirmed with a break below the neckline of the pattern at 1.00266 with an anticipated downside target at 0.99962; indicating a devaluation or weakening in the USD or conversely strengthening in the CHF. The target is calculated by taking the height of the double top from the neckline to the high and extrapolating or projecting it downward. It is interesting to note this ends up at the previous resistance, now new support at around 0.99962. A failure for the current setup would be considered with a close of the currency pair above the highs at 1.00575, denoting further strength in the dollar.