Trading Absa Group

Research Notes For 26 to 30 May > https://www.unum.capital/post/r2630may

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For ABSA Group, here's a breakdown of the current price action:

• The 7-day trend is indicated as "Strong," while the 14-day trend is "Bullish."

Comparison:

• Both the short-term (7-day) and slightly longer short-term (14-day) trends indicate upward momentum ("Strong" and "Bullish" respectively). This suggests a consistent buying pressure across these timeframes. The "Bullish" 14-day trend reinforces the "Strong" 7-day trend, indicating that the recent strength is part of a broader upward movement.

  
  

Potential Trading Approach for ABSA Group:

• Short Term (Approximately Next 1 to 10 Trading Days): The model notes, "Aggressive Buying But Do Not Chase-Look For Overshoot or Failure To Hold Prior Session Range Highs To Short-Sell Back To The 8-EMA."

  • Approach: While there is aggressive buying, avoid simply chasing the price higher. Look for potential short-sell opportunities if the price overshoots or fails to hold above the prior session's high, targeting a move back down to the 8-period Exponential Moving Average (EMA).

• Medium Term (Approximately Next 2 to 4 Weeks): The model indicates "Strong Attempt At A Bullish Reversal Following A Consolidation Phase."

  • Approach: The medium term suggests that the recent bullish activity is likely a strong attempt to reverse from a prior consolidation. This supports a bullish bias over the next few weeks.

• Long Term (Approximately Next 5 to 8 Weeks): The model states, "Recently Advanced From A Sideways Consolidation. If It Doesn't Hold Prior Session Highs Then Consider Potential For Retracement To Retest The Range Breakout."

• Approach: The long-term perspective indicates a breakout from a sideways consolidation. However, there's a caution: if the price fails to hold prior session highs, there's a possibility of a retracement to retest the breakout level.

  
  

Overall Trading Considerations for ABSA Group:

• Consistent bullish momentum: Both short and slightly longer short-term trends are bullish, supporting upward price action.

• Short-term caution: Despite the buying pressure, the model advises against chasing and suggests looking for short-sell entries on weakness relative to the prior session's high.

• Medium-term bullish reversal: The medium term reinforces the bullish sentiment following a consolidation.

• Long-term breakout with a caveat: The long term shows a breakout, but highlights the importance of holding prior session highs to avoid a retest of the breakout level.

In summary, for ABSA Group, the current view is bullish across short to medium terms, with a long-term bullish sentiment following a breakout. However, short-term traders should be cautious of potential overshoots and failures at prior session highs for tactical short opportunities.

Lester Davids

Senior Investment Analyst: Unum Capital