BOTTOM LINE: CPI is testing the upper slope of its long-term bull channel
(Click image to enlarge)
We had recommended a long on CPI above 81,100cps in June, as it had breached the horizontal slope of an ascending triangle. It recently tested our target at 95,340cps and is now encountering resistance at 95,880cps. It’s also testing the upper slope of its channel, and because it has failed a few times before to breach it, upside momentum may slow.
If so, we recommend investors close long positions, as CPI could reverse to its blue dashed trendline - or even to the lower slope of the channel (the red bold trendline).
CPI would form new highs on continued upside through the upper slope, and the next target would be at 110,500cps.
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.
Read an interview with Moxima, or discover Moxima’s trading insights via Sharenet’s Technical Analysis Newsletter.