BOTTOM LINE: GRT had confirmed a positive breakout of its inverted head-and-shoulders pattern but it’s now losing upside momentum.
(Click image to enlarge)
In February, GRT breached the neckline of its inverted-head-and-shoulders, completed a return move and traded through our buying level at 2,5702cps. However, after failing to breach the upper slope of its major bull channel, GRT gave up its gains and is now teetering on the lower slope.
The 3-week RSI is oversold, but if it should remain bearish, GRT could confirm a negative breakout below 2,455cps, so in that case, go short. A downside to 2,075cps could ensue at first, with the target at 1,795cps.
If the RSI forms rising bottoms, buying momentum may accelerate towards the upper slope of the channel. If so, go long above 2,585cps, with the target situated at 2,960cps.
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.