Trading Pick n Pay: Stay Ready For A Potential Bullish Reversal Candle

Research Notes For 09 to 13 June > https://www.unum.capital/post/r0913june

Trade Local & Global Financial Markets with Unum Capital.

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Here's a breakdown of the current price action:

• The 7-day trend is indicated as "High Bearish Momentum / Approaching Oversold," while the 14-day trend is "Bearish."

Comparison: Both the short-term (7-day) and slightly longer short-term (14-day) trends indicate downward momentum ("High Bearish Momentum / Approaching Oversold" and "Bearish" respectively). This suggests consistent selling pressure across these timeframes, with the 7-day trend indicating an approaching oversold condition. The "Bearish" 14-day trend reinforces the "High Bearish Momentum" 7-day trend, indicating that the recent weakness is part of a broader downward movement.

Potential Trading Approach:

• Short Term (Approximately Next 1 to 10 Trading Days): The model notes, "Aggressive Selling Wait For Lower Time Frames To Stabilize."

  • Approach: While there is aggressive selling, it is advised to wait for lower time frames to stabilize before making a move. This suggests caution and patience until the selling pressure subsides or shows signs of exhaustion on a shorter timeframe.

• Medium Term (Approximately Next 2 to 4 Weeks): The model indicates "Persistently Weak But Monitor If Price Can Reclaim Prior Session Lows For A Bullish Reversal Trade."

  • Approach: The medium term suggests persistent weakness. However, it advises monitoring if the price can reclaim prior session lows, which could signal a bullish reversal. This implies a potential shift in momentum if certain conditions are met.

• Long Term (Approximately Next 5 to 8 Weeks): The model states, "Very Weak Wait Until It Stabilizes On The Lower Time Frame."

  • Approach: The long-term perspective indicates significant weakness. It strongly advises waiting until the price stabilizes on a lower time frame before considering any action. This reinforces a cautious, wait-and-see approach due to the pronounced bearishness.

Overall Trading Considerations:

• Consistent bearish momentum: Both short and slightly longer short-term trends are bearish, supporting downward price action, with the 7-day trend approaching oversold levels.

• Short-term caution: Despite the selling pressure, the model advises waiting for lower timeframes to stabilize before engaging.

• Medium-term potential for reversal: The medium term reinforces the weakness but highlights the possibility of a bullish reversal if prior session lows are reclaimed.

• Long-term severe weakness: The long term shows very significant weakness and strongly suggests waiting for stabilization on a lower timeframe.

In summary, for PIK, the current view is bearish across short to long terms, with immediate aggressive selling and persistent weakness. However, there's a potential for a bullish reversal in the medium term if specific conditions are met. Long-term traders should exercise extreme caution and wait for clear signs of stabilization.

Lester Davids

Senior Investment Analyst: Unum Capital