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WE LOOK AT AN interesting media chart – Naspers N – as well as a chart of the copper price. Surprisingly perhaps, there’s a close correlation between the two. (That’s probably because the copper price is a good indication of the general health of the world economy). Naspers is building up for an exciting breakout. Meanwhile, the copper price has pulled back to an area of price support and looks ready to rally again.
NASPERS N - A BREAKOUT COMING
Trend: Short term sideways. Medium and long term up.
Strategy: Buy/add to on a close above line 2.
* Naspers has been moving sideways over recent months in a “diamond formation” (as labelled). That’s a rare pattern. The odds favour a breakout to the upside. Line 2 is the crucial breakout level to monitor.
* The MACD (on top) is still moving up from its oversold region and still has good upside potential before becoming overbought.
* Buy if not in/add to current longs on a close above line 2 (R405).
* However, aggressive traders buy if it pulls back to line 1 first (R383) before the breakout. Then buy again on the close above line 2.
* A breakout above line 2 will set up a minimum upside target of R445. Longer term I expect it to eventually reach R470 (with corrections in between).
* Place your stop-loss as a closing price below line 1– ie, below R382. But once the price gets above R420 move your stop up to below R400.
COPPER (US dollars) – OVERSOLD
Trend: Short term sideways, but medium and long term up.
Strategy: Buy.
* Copper has been moving sideways over recent months in a broadening formation (lines 3 and 4). It recently tested line 3 support as well as line 1, which is long-term support (at $95). Lines 1 and 2 form a large broadening formation (or “megaphone”).
* The daily stochastic oscillator (on top) is clearly oversold, which is a bullish set-up on the chart.
* Traders buy it at current levels for a short-/medium-term rally. (The price at the time of writing was US$96,99.)
* Look for a rally to line 4 initially. Line 4 was at the $104,40 level. Lock in trading profits there/near there. But a clear breakout above line 4 – ie, a close above $106 – will be a re-entry signal. This will set up further upside to line 2 at the $113 level (which will be very bullish for stocks if it happens).
* Place your initial stop-loss as a close below line 3 at $93,85 (spot price).
Please note: For more recommendations and charts by the author on shares, stock indices and commodities please go to www.themarket.co.za.
NASPERS N - A BREAKOUT COMING
Trend: Short term sideways. Medium and long term up.
Strategy: Buy/add to on a close above line 2.
* Naspers has been moving sideways over recent months in a “diamond formation” (as labelled). That’s a rare pattern. The odds favour a breakout to the upside. Line 2 is the crucial breakout level to monitor.
* The MACD (on top) is still moving up from its oversold region and still has good upside potential before becoming overbought.
* Buy if not in/add to current longs on a close above line 2 (R405).
* However, aggressive traders buy if it pulls back to line 1 first (R383) before the breakout. Then buy again on the close above line 2.
* A breakout above line 2 will set up a minimum upside target of R445. Longer term I expect it to eventually reach R470 (with corrections in between).
* Place your stop-loss as a closing price below line 1– ie, below R382. But once the price gets above R420 move your stop up to below R400.
COPPER (US dollars) – OVERSOLD
Trend: Short term sideways, but medium and long term up.
Strategy: Buy.
* Copper has been moving sideways over recent months in a broadening formation (lines 3 and 4). It recently tested line 3 support as well as line 1, which is long-term support (at $95). Lines 1 and 2 form a large broadening formation (or “megaphone”).
* The daily stochastic oscillator (on top) is clearly oversold, which is a bullish set-up on the chart.
* Traders buy it at current levels for a short-/medium-term rally. (The price at the time of writing was US$96,99.)
* Look for a rally to line 4 initially. Line 4 was at the $104,40 level. Lock in trading profits there/near there. But a clear breakout above line 4 – ie, a close above $106 – will be a re-entry signal. This will set up further upside to line 2 at the $113 level (which will be very bullish for stocks if it happens).
* Place your initial stop-loss as a close below line 3 at $93,85 (spot price).
Please note: For more recommendations and charts by the author on shares, stock indices and commodities please go to www.themarket.co.za.
