TECHNICAL ANALYSIS: PSG seen breaking out of range | Fin24
 
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TECHNICAL ANALYSIS: PSG seen breaking out of range

Nov 29 2018 13:29
Colin Abrams

After moving sideways this entre year so far, PSG is currently breaking out of its large sideways range, and this is bullish for a going recovery, as shown on it chart below.

PSG – Breaking out

Recommendation: BUY
Current Trend: Short- and med-term up. Long-term sideways.
Strategy: Buy at current levels or better for a recovery rally.

Chart Setup: PSG has finally closed above our breakout levels of lines 2 and 3 that we've been monitoring for some time (see circle). As such, it has broken its entire sideways range of this year (which is a large inverse head and shoulders pattern).

• Its short-term Stochastic is giving a lower high (a negative divergence), which is a concern. But, now that the price has broken out, I don't think anything will stop it from moving higher.

(Daily)

PSG chart 625

Strategy Details: Buy it at current levels or better, for an ongoing recovery over the coming months.

Target: First target is R254-R259, based on a broadening formation formed by lines 1 and 2. The second target is R278, based on the height of the inverse head and shoulders projected up.

Stop-loss: A close below R227.40. From R246.50 raise the stop to a close below R234.40 (line 2). From R252 short-term traders only, use a breaking of its prior one-day low as a trailing stop. But med-term players keep it wider (e.g. below line 2), if holding for the R278 target.  

  • Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend trading courses, please go to www.themarket.co.za

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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psg  |  markets  |  equities
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