BOTTOM LINE: LON is testing the resistance trend-line of its steeper bear trend
(Click image to enlarge)
With the 3-week RSI in overbought territory, a near-term pull-back is pending. Support retained at 1,025cps would be a bullish sign; LON could regain upside momentum and confirm a positive breakout above 1,695cps, and aim for the 2,100cps resistance mark.
But bear in mind that this would be a mere recovery within the major bear trend - therefore, stop losses must be carefully watched.
A downside below 1,025cps would mark defeat, and LON would return to the 820cps prior low.
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.