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Do you know what? I missed the recent oversold rebound in Sanlam.
It wasn't one of the shares I was paying attention to at the time.
Cool, no problem.
We don't have be everything at the same time to make money. Some clients made money in Resources. Some clients made money in some Retailers. Some clients are starting to make money in the Banking shares which have started to turn up, emerging from oversold conditions.
My eye is always tracking several potential opportunities at a time, with the provisional levels to buy or sell at, however at the recent bottom, I missed Sanlam.
No big deal - I can't catch them all.
Going through the charts as I am continuous doing, I wanted to see if there was an automated signal when it bottomed.
On Monday 15 April (pre-market), the short term (1 to 10 days) stated that the reward-to-risk was attractive for a buy/long position.
On Wednesday 17 April (pre-market), the short term (1 to 10 days) and medium term (2 to 4 weeks) stated that the reward-to-risk was attractive for a buy/long position.
The share rallied from R62 to above R67, generating cash flow for traders who were positioned for the move.
My automated model (Tactical Trading Guide) is a part of my daily research and covers close to 90 shares (JSE Mid and Large Caps).
The data set helps us cover lots of ground and provides a high level view on a share, even when time does not permit me to write about it.
It provides an unbiased view of a share's position and helps traders determine some of the following:
Whether the reward-to-risk is attractive for a buy/long position?.
Whether a share is weak or if aggressive buying is underway.
Whether a trader can look to buy a pullback into a key moving average (continuation trade).
Whether a share needs to break a range for a new trend to be determined (bullish or bearish).
Whether a traders needs to monitor for a change of character that could lead to a bullish or bearish reversal.
Whether a share could start a consolidation phase.
Whether the upward momentum is slowing (if it's in a bullish phase).
Whether buyers can look to 'phase in' to a position (if it's in a bearish phase).
Whether a share lacks directional bias.
In December, I expanded on this tool, highlighting several opportunities that flashed in real-time.
In case you missed, you can read about it here:
Clients of our firm have access to these research insights.
To become a client, get in touch today.
Lester Davids
Analyst: Unum Capital