BOTTOM LINE: BIL is testing the upper slope of its long-term bull channel, which is also a long-term trend-line.
We had recommended a long above 25,500cps in April, as we anticipated gains to either the major trend-line (dated back to 2005) or the 28,315cps pivotal point. BIL has now exceeded our target, but because the 3W RSI is mega-overbought, investors may have to revise positions or even close them.
If BIL pulls back but holds above 25,500cps - thereby forming another rising bottom - upside would resume through 30,140cps and towards 33,000cps. Long-term investors could stay long, and another buying opportunity would be presented above 30,140cps.
A downside through 25,500cps could see BIL correct within its current bull channel and return to the dashed blue slope.
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.