Price Forecasts & Demand/Supply Zones - Tuesday, 02 April 2024

READING TIME: 2 MINUTES

Anglo American Plc, Woolworths, Nedbank, Dis-Chem Pharmacies, Standard Bank + Updates: Brent Crude Oil, US Energy Sector, Sasol, Global Insurers & Re-Insurers (Reduce)

To trade, or open a new account, contact the Unum Capital Trading Desk:

E-mail: tradingdesk@unum.co.za | Call: 011 384 2923

AGL ANGLO AMERICAN PLC

AGL ANGLO AMERICAN PLC was presented to clients on Thursday 07 March (pre-market), highlighting the potential price path (yellow candles) and as well as the readings from the Tactical Trading Guide. The original chart is shown below.

WHL WOOLWORTHS HOLDINGS LTD

Albeit simple, I consider 'PRICE DISTANCE vs MOVING AVERAGE' to be a useful tool in assessing reward-to-risk. Unum Capital clients were alerted to my view on WHL close to R80, highlighting the potential for downside risk. Last week the share close below R60.

NED NEDBANK GROUP

NED Nedbank Group - Further Comment - Traded into the sell zone at 23800c (red shaded area on chart below), with a strong rejection (see negative candle on 12 March).

DCP Dis-Chem Pharmacies. Losing Upside Momentum, Pullback Expected. In a research note on Friday 08 March, I Highlighted 5 Points which suggest that the share is overbought and that a pullback/retracement is likely: (1) Rating: Overbought + Readings via Tactical Trading Guide (2) Trading +44% above it's October low (2230c to 3222c) (3) Nearing it's 61.8% Fibonacci Retracement Zone (4) Relative to the Top 40 Index, DCP is trading 25% above it’s 200-day moving average. By historical measures, this appears extended to the upside (5) On an absolute basis, the share is trading 22% above it’s 200-day simple moving average. By historical measures, this appears extended to the upside.

REM REMGRO - (1) Aggressive selling pressure but attempting to settle around multi-year support (it can fluctuate around this level)  - down from 16300c at the beginning of the year (2) 48% Discount To Net Asset Value (NAV 23695c vs Last Close of 12208c).

SBK Standard Bank. Clients were alerted to the potential for downside risk discussed on Monday 19 February (pre-market), with the distance vs the 200-week SMA (+37%) being extended by historical measures (see first chart below). We have since seen the share price unwind from R208 at the time to R185. Selling pressure remains strong while the the share is nearing an opportunity to re-enter on buy/long side (R174 to R177 as  a provisional range).

UPDATES: Brent Crude Oil & Energy Shares - Strong Performers Over The Month & Quarter.

Unum Capital clients were alerted to longs in both Brent Crude Oil and the Energy Sector (XLE ETF)

Several energy shares appeared 2 weeks earlier (on 26 January) on my technical screeners. Selections were as follows:

• Valero Energy (VLO),

• Energy Transfer (ET) and

• Western Midstream Partners (WES)
  

Published and played back (green shaded area) via Trading View:

On local markets, clients were alerted to the setup on SOL Sasol on the morning of Tuesday 19 March at 13368c. The share has since advanced by 1272c to close at 14640c (+9.5% ungeared). The original extract is shown below (Tactical Trading Guide & Chart):

Brent Crude Oil - Unum Capital clients were alerted to a re-introduction of buy/long risk on the comment on 07 December, via the Telegram group. We have since seen a steady increase, from $74 to a high of $87.66, supporting the above-mentioned view on energy shares.

Update: Global Insurers and Re-Insurers were sectors that featured prominently on my technical screen in early January, which I then highlighted to clients. The original comment + chart is shown below. Now it may be time to reduce.

Strong Upside Follow-Through on AJG (Arthur J Gallagher), MMC (Marsh Mclennan), HNR1 (Hanover Re) and MUV2 (Munich Re). Updated Charts Below (yellow vertical line is the time of the alert, 11 January, pre-market).

Lester Davids

Analyst: Unum Capital