BOTTOM LINE: VOD has bounced on the lower slope of its long-term bull channel after recently correcting.
Currently encountering resistance at 15,770cps, VOD could range between that level and the lower slope of its channel. Because the RSI is oversold, we expect VOD to regain upside, and a move above 15,770cps could see VOD recover through 16,265cps - so in that case, go long.
However, the 3-week RSI must simultaneously return to bullish territory - trade through the red bold trendline - to substantiate the upside on the price chart. Thereafter, VOD should retest either the 18,700cps level or the upper slope of its channel.
VOD could breach the lower slope on a reversal below 15,770cps, and a negative breakout would be confirmed through 13,850cps. In this case, go short.
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.