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TECHNICAL ANALYSIS: Resilient property stocks set for an uptick

Apr 26 2018 07:33
Colin Abrams

Cape Town - Property stock Resilient has been badly beaten down this year so far, but is now forming a potential bullish reversal chart pattern, says technical analyst Colin Abrams.

If this pattern confirms the price will recover sharply, as shown below.

Resilient [JSE:RES] – Major reversal forming?

Recommendation: Buy a breakout

Current Trend: Short-term sideways. Med and long-term down, but oversold.

Strategy: Buy a closing price above line 1 (R70.00).

(Daily)

RES

Chart Setup: After enduring a ‘waterfall’ decline in recent months, Resilient is stabilising and forming a ‘potential’ inverse head and shoulders. It needs to close above line 1 to confirm it.

  • Its MACD oscillator (on top) is rising from an oversold level after giving a positive divergence, and has plenty of room to move up.

Strategy Details: Buy it on a close above line 1 (R70).

Target: Once (if) confirmed, the minimum target will be R100, based on the height of the inverse head and shoulders projected up.

Stop-loss: Place your stop as a close below R62. From R83 move stop up to a close below R68. And from R90 use a breaking of its prior two-day low as a trailing stop to protect profits.

  •  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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