Trading Sasol: Pullback To 8-EMA Followed By Upside Follow-Through + Updated Model Reading

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

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The share is in line with the model reading which stated that the 8/21-day EMA range was a level to which the share could retrace into before potentially moving higher. Since then we saw the price consolidate, re-test the 8-day EMA then rally to a multi-month high today (Tuesday, 10 June). the 200-day simple moving average and 50-week exponential moving average is a possible resistance range in the ultra short term. Above that R107 to R112 is a broader selling/resistance range while a pullback into R76 to R79 could offer another re-accumulation range.

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• Previous Post (26 May)

• How To Trade Sasol, and

• Recent Opportunities via the Price Action Model

  
  

The share has had a strong rebound off the 09 April lows (5301c) to it's recent high of 8662c. In the process, the 50-day EMA was reclaimed with strong candle structure reflecting strong buying interest. The current two-day retracement (from +8600c to 7900c) appears to be the start of a re-test of the 50-day exponential moving average (which has now started to turn up). For active traders looking for a buy re-entry range, the 50-day EMA (at or just below) is a provisional range. We are marking 6900c to 7300c for now. The 200-day SMA continues to trend down, which could act as a temporary resistance range.

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Recent Opportunities: Time-stamped examples from the price action model.

INTO THE LOWS (04 April): "Aggressive selling underway, however the buy/long reward-to-risk may be attractive".

INTO THE HIGHS (20 & 21 May): "Aggressive buying underway but overbought on the lower time frames. Expect a consolidation or a minor retracement".

Lester Davids

Senior Investment Analyst: Unum Capital