Sasol Ltd: Upside Correction Is Pending

24 March 2017 | Moxima Gama
 


BOTTOM LINE: SOL remains range bound between 50,000cps and 35,400cps

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Possible scenario:

In January this year, we had recommended a long above 41,915cps, as SOL would have confirmed a positive breakout of a double-bottom pattern. SOL breached that level, but the 3-week RSI entered overbought territory.

After the RSI corrected, SOL failed to regain substantial upside - and is now testing key support at 35,400cps. The RSI is slightly oversold and because SOL has held there before, it may reverse; failing which, we recommend a short position, as downside to 30,050cps could be rapid. 

Alternative scenario:

If SOL bounces on the 35,400cps support level, it would have to trade above 41,915cps to confirm a substantial bullish recovery. A buy signal would be triggered above that level, with potential gains to 50,000cps.

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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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Moxima

Moxima Gama
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.

Read an interview with Moxima, or discover Moxima’s trading insights via Sharenet’s Technical Analysis Newsletter.


Disclaimer:
The information contained in this article is for informational purposes only and must not be regarded as a prospectus for any security, financial product or transaction. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial issue. Investors should consider this research/article as only a single factor in making their investment decision. We recommend you consult a financial planner/advisor to take into account your particular investment objectives, financial situation and individual needs. The views and opinions (where expressed) in this article are those of the author and do not necessarily reflect the official policy or position of Sharenet.

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