Bid Corp: Improving Candle Structure In An Oversold Range + Relative Distance at Extremes

Lester Davids
4 hours ago
2 min read

Research Notes December 2025 > https://www.unum.capital/post/rdec2025

Trade Local & Global Financial Markets with Unum Capital.

To get started, email tr adingdesk@unum.co.za

Most recently, the share gave us a trading opportunity for a 5% tactical rebound. Longer term, the share, on a relative basis, is trading at extremes vs it's 200-day moving average.

Indicator: 200-Day Moving Average Distance (Relative)

Current Reading: -23.98%

DOMINANT TREND: ACCELERATED UNDERPERFORMANCE

The BID/J200 ratio has entered a parabolic descent. The breakdown below the 2020 "Covid-low" support levels indicates a major structural shift. Bid Corp is currently decoupled from the broader market strength of the JSE Top 40, signaling intense selling pressure on a relative basis.

STATISTICAL EXTREME (MA DISTANCE)

At ~24% below its 200-day Moving Average, the stock is at its most extended "oversold" state in over a decade. Historically, deviations beyond 15-18% are rare for this pair; the current reading represents

a 3-standard deviation event from the mean.

MEAN REVERSION POTENTIAL

The "Rubber Band" theory suggests a high probability of a snap-back rally. In 2018, 2020, and 2022, similar (though less extreme) extensions resulted in sharp periods of outperformance. However, the current vertical drop suggests the "mean" itself is now falling rapidly, which can dampen the magnitude of the eventual recovery.

REWARD-TO-RISK RATIO

Upside: Potential 24% relative gain if the ratio returns to its 200-day equilibrium. Downside: Low technical visibility. Until the price flattens, the "floor" remains theoretical. Verdict: Mathematically favorable for long-term contrarians, but high-risk for short-term traders due to lack of price stabilization.

STRATEGIC OUTLOOK: MONITOR FOR EXHAUSTION

The current price action represents "capitulation." Tactical investors should look for the MA_dist indicator to cross back above the -20.00 threshold as a signal that the selling climax has peaked. Avoid front-running the turn until the daily candle shows a reversal pattern.

Previous Post (18 December): Short Term Traders, Grab This +5% on Bid Corp (Take Profit)

The share has started to follow the 'potential price path'.

Short term traders, take profit on this +5% move.

Medium term traders, hold and raise your stop-loss for potentially further gains.