BOTTOM LINE: BAT has breached the resistance trend-line of its long-term bear trend and is ranging between 4,500cps and 3,315cps.
BAT is again encountering resistance at 4,500cps. If support holds firmly above 3,960cps, prepare to go long through the 4,500cps mark. A positive breakout of the sideways pattern would be confirmed above that level.
Because BAT has encountered major resistance there a few times before, the breakout could be rapid towards 5,150cps. In that case, increase positions above that level. Resistance at 5,785cps could then be targeted.
A reversal through 3,960cps, including the 3W RSI breaching the lower slope of its bull channel, could see BAT return to the 3,315cps key support mark. If so, go short below that level. Keep in mind that the 2,490cps level could be retested.
Technical Analyst, Sharenet
Moxima has a B.Comm Finance from the University of South Africa and is a certified Chartered Market Technician Level 2, currently completing Level 3. She has been a technical analyst for 10 years, working for BJM, Noah Financial Innovation and for Standard Bank as part of the Research Team in the Treasury Division of CIB. She now runs her own business, The Money Hub, and consults for Sharenet. Moxima has been rated as one of the top 5 technical analysts in South Africa and outperformed the market during the recent recession. She regularly makes an appearance as a guest on CNBC Africa and writes often for Finweek and Sharenet’s Views.