MTN Group: Approach + Trading Considerations

Research Notes For 07 to 11 July > https://www.unum.capital/post/r0711july

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Overall Trading Considerations for MTN Group:

Consistent bullish momentum: The short-term (7-day) and slightly longer short-term (14-day) trends are strongly bullish, indicating consistent buying pressure. However, this is accompanied by strong cautions against chasing the price and advice to look for pullbacks or potential short-selling opportunities on overshoots in the medium to long term.

Short-term caution: Despite the aggressive buying pressure, the model advises looking for pullbacks to the 8 or 21-EMA as buying opportunities, rather than chasing the price, due to potential weakness on lower time frames.

Medium-term strong move with caution: The medium term indicates a very strong move with buyers in control, but with a strong warning not to chase the price. There's a noted potential for failure to hold highs, which could make the 8-EMA a short/sell target.

Long-term aggressive buying underway with short-sell potential: The long term also shows aggressive buying, but explicitly warns against chasing. It suggests looking for overshoots or failure to hold prior session range highs to initiate short-sell positions back to the 8-EMA.

In summary, for MTN Group, the current view is bullish across short to medium terms, with aggressive

buying in the long term. However, traders across all timeframes should be highly cautious, focusing on buying pullbacks and being prepared for potential short-selling opportunities if highs are not sustained or overshoots occur.

The model points to a general upward trend for the price of MTN Group, but with significant caveats regarding sustainability and entry points.

Here's a breakdown of the current price action: The 7-day trend is indicated as "Strong," while the 14-day trend is "Very Bullish."

Comparison: Both the short-term (7-day) and slightly longer short-term (14-day) trends indicate upward momentum ("Strong" and "Very Bullish" respectively). This suggests a consistent buying pressure across these timeframes. The "Very 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:

Short Term (Approximately Next 1 to 10 Trading Days): The model notes, "Buyers In Control But Weakness On Lower Time Frame-Look For Pullback To 8 or 21-EMA (Buy Range) Before Next Move Higher."

• Approach: While buyers are in control, there's a note of potential short-term weakness. The recommended approach is to look for a pullback to the 8 or 21-period Exponential Moving Average (EMA) to enter a buying range before the next move higher. This suggests a "buy the dip" strategy within an overall bullish short-term trend.

Medium Term (Approximately Next 2 to 4 Weeks): The model indicates "Very Strong Move Buyers In Control But Don't Chase-May Fail At Attempt To Hold The Highs-If It Doesn't Hold Then The 8-EMA May Be A Short/Sell Target."

• Approach: The medium term suggests a very strong upward move with buyers in control. However, the model strongly advises against chasing the price and highlights a potential failure to hold current highs. If these highs are not sustained, the 8-EMA could become a target for short-selling. This implies a bullish outlook but with significant risk management and potential for reversals.

Long Term (Approximately Next 5 to 8 Weeks): The model states, "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: The long-term perspective points to aggressive buying. However, it comes with a critical warning not to chase the price. Instead, traders should look for an overshoot of current levels or a failure to hold prior session range highs as potential opportunities to initiate short-sell positions, targeting a move back to the 8-EMA. This indicates a bullish bias but with clear conditions for potential counter-trend trades.

Lester Davids

Senior Investment Analyst: Unum Capital