BOTTOM LINE: DSY’s current pull-back could be a mere correction after confirming its falling-wedge pattern
In July, we recommended a long above 13,620cps - then DSY confirmed a positive breakout of its falling-wedge pattern above that level. However, DSY is currently encountering resistance at 14,635cps, and the 3-day RSI is approaching the support trend-line of its short-term bull trend.
If the RSI retains its uptrend, DSY should breach the ceiling at 14,635cps, so in that case, increase long positions and head towards our target at 16,320cps.
If the RSI turns bearish, DSY could retest the 14,160cps support mark. Failure to hold there may trigger further selling towards 13,620cps. In this instance, close long positions below 14,160cps. DSY could even retest the upper slope of its falling-wedge pattern.
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.