BOTTOM LINE: REI has confirmed a positive breakout
(Click image to enlarge)
- After bouncing on the second support trendline of its primary bull trend REI has escaped its short-term bear trend - and even confirmed a positive breakout above 2,920cps
- With the 3-week RSI overbought, we anticipate a pull-back soon
- A reversal towards 2,715cps would serve as a return move - which is a common reversal after a breakout
- Support retained above that level should prompt a recovery through 2,920cps - presenting another good buying opportunity
- The upside target would be at 3,620cps
- REI would breach its second support trendline below 2,520cps
- Downside to 2,095cps could then ensue
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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.