BOTTOM LINE: NPN is trading in its long-term bull channel
(Click image to enlarge)
After testing the upper slope of the channel, NPN pulled back to the lower slope. Having already bounced on the lower slope, a move above 227,000cps could see NPN reclaim its losses towards the upper slope of the channel. Go long above 227,000cps and increase positions above 225,360cps, and ensure that the breakout on the price chart is substantiated by the 3-week RSI positive breakout, if it is a symmetrical triangle.
Resistance encountered at 227,000cps, together with the RSI remaining bearish, would increase the chances of NPN breaching the lower slope of its channel. A negative breakout would be confirmed below 188,300cps, so in that case, go short. The target would be at 152,195cps.
Technical Analysis helps turn information into investments.
As you can see from the article above, the strength of technical analysis lies in its ability to measure probabilities, identify high-confidence ’buy’ and ’sell’ signals, and minimise risk. When used correctly TA is a powerful tool that can radically change the way you trade.
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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.