BOTTOM LINE: MTN has been range bound between 15,650cps and 10,475cps
After maintaining support at 10,475cps, MTN breached the resistance trend-line of its medium-term bear trend. It confirmed a positive breakout above 12,740cps, and then pulled back from an overbought position - as a return move, which is a common reversal after a breakout.
Now that MTN is regaining composure, we expect it to trade through our buying level at 12,740cps once again. Investors could increase positions at 13,500cps, and the target remains at 15,650cps.
A reversal below 11,975cps could see MTN retest its key support level at 10,475cps, and a failure to hold there would extend medium-term downside through 9,500cps.
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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.