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TECHNICAL ANALYSIS: Sappi offering an opportunity for traders

Aug 02 2018 17:59
Colin Abrams

Sappi [JSE:SAP] has broken out of a short-term consolidation pattern and has a higher target, thereby offering an opportunity for traders.

Sappi (SAP) – Higher target

Recommendation: Traders buy

Current Trend: Short- and  med-term up. Long-term sideways.

Strategy: Buy at current levels or better for a short-term rally.

(Daily) 

Chart Setup: Sappi has broken out of a neat symmetrical triangle (lines 1 and 2). It’s generally working its way higher to long-term resistance, which is line 3 at R101.70.

  • Its short-term Stochastic can still move higher
sappi

Strategy Details: Buy it at current levels or better. (It was at R93.70 at the time of writing).

Target: Minimum target to R100 i.e. the height of the triangle projected up. Take most profits there. Take the rest closer to R101.70 (line 3) if reached. (Note, that is also a target from a large rounding bottom pattern which has taken place this year so far, not shown).

Stop-loss: A close below R90.00. From R97.00 raise the stop to breakeven (entry) and from R98 raise it again to a breaking of its prior two-day low, 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

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sappi  |  equities  |  markets
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