Trading Truworths: Approach For Multiple Time Frames

Research Notes For 26 to 30 May > https://www.unum.capital/post/r2630may

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For Truworths, here's a breakdown of the current price action:

The 7-day trend is indicated as "Strong," while the 14-day trend is "Rangebound."

Comparison:

The 7-day timeframe, being the shorter-term, suggests current buying strength ("Strong"). However, the 14-day timeframe indicates a "Rangebound" market, suggesting that this short-term strength might be contained within a broader period of sideways price action. The "Strong" reading on the 7-day chart could be an early indication of a potential move out of the range defined by the 14-day trend, but it's not yet confirmed.

Potential Trading Approach for Truworths:

Given these readings, a trader might approach Truworths with the following considerations:

• Short Term (Next 1 to 10 Trading Days): The model notes, "In or Commencing Upward Trend However Strongly Consider The Potential Failure To Hold Prior Session Range Highs Which Will Create A Tactical Short-Sell Opportunity."

  • Approach: Acknowledge the short-term upward trend. However, be wary of immediate long positions due to the caution about failing at prior session range highs. Look for potential short-sell opportunities if the price fails to hold above these highs.

• Medium Term (Next 2 to 4 Weeks): The model indicates "no reading available."

  • Approach: Without a medium-term outlook from the model, focus on how the short-term price action interacts with the 14-day range. A breakout from the range on strong volume could suggest a shift.

• Long Term (Next 5 to 8 Weeks): The model states, "After A General Downward Trend Some Buyers Are Showing Interest."

  • Approach: The long-term perspective suggests potential bottoming or a shift in sentiment after a downtrend. This could mean that short-term weakness might eventually lead to longer-term buying opportunities if this interest from buyers sustains.

Overall Trading Considerations for Truworths:

• Short-term strength vs. medium-term range: The "Strong" 7-day trend needs to be viewed in the context of the "Rangebound" 14-day trend. The upward momentum might face resistance within this range.

• Potential for tactical shorts: The model specifically highlights the possibility of short-selling if prior session range highs are not maintained.

• Long-term watch: The emerging buyer interest in the long term suggests keeping an eye out for potential trend reversals, but this needs confirmation through shorter-term price action.

In summary, for Truworths, the current view suggests being cautiously bullish in the very short term but aware of potential resistance from the longer-term range, with tactical short opportunities possible. The longer term hints at a possible shift in buyer interest that could develop over time.

Lester Davids

Senior Investment Analyst: Unum Capital