BOTTOM LINE: REI is consolidating within its uptrend
Currently constructing the final shoulder of its inverted head-and-shoulders pattern, and with the 3-week RSI turning bullish, REI could be headed to the neckline of its bullish reversal pattern (red bold slope). A positive breakout of the pattern would be confirmed above 3,310cps. Such a move would end a one-year consolidation, with potential upside to the 4,050cps target.
A negative breakout through its second support trendline (blue dashed trendline) would be confirmed below 2,530cps, and downside to either the blue bold trendline or the 1,775cps support level could then follow.
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.