Pick N Pay Stores Ltd: Exceeding Our Target

31 May 2018 | Moxima Gama

BOTTOM LINE: PIK has breached the neckline of its inverted head and shoulders pattern.

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Possible scenario:

We had recommended a long in February when PIK confirmed a positive breakout of its long-term falling-wedge pattern above 6,590cps, and the target was situated at 7,690cps. Momentum became sluggish in April, but we suggested investors stay long as a potential bullish reversal pattern was in the making. PIK has breached the neckline of that pattern and has exceeded our first target at 7,690cps.

Now that the 3W RSI has corrected from a mega-overbought position and support seems retained at 7,340cps, we expect PIK to recover its losses. Go long above 8,425cps - PIK must overcome that resistance level to embark on a new bull phase. The first upside target is situated at 9,875cps. 

Alternative scenario:

A move through 7,340cps could see PIK retest support at 6,150cps.



Moxima Gama
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.

The information contained in this article is for informational purposes only and must not be regarded as a prospectus for any security, financial product or transaction. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial issue. Investors should consider this research/article as only a single factor in making their investment decision. We recommend you consult a financial planner/advisor to take into account your particular investment objectives, financial situation and individual needs. The views and opinions (where expressed) in this article are those of the author and do not necessarily reflect the official policy or position of Sharenet.

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