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

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psg  |  markets  |  equities
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