BOTTOM LINE: BAW has been forming a long-term inverted head and shoulders pattern.
Currently teetering on the neckline of the pattern, a positive breakout of the pattern would be confirmed above 13,910cps - in this case, go long. However, the 3-week RSI must simultaneously breach the upper slope of its triangle to validate the breakout on the price chart. Thereafter, BAW would form new highs, with its short-term target situated at 18,035cps.
A reversal through the blue dashed trendline would mark defeat, potentially triggering a short signal below 11,960cps. A downside to 10,500cps could ensue at first, and then to 9,260cps on continued selling.
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.