BOTTOM LINE: SNH confirmed a double-top pattern below 7,750cps in October 2016. It then formed a symmetrical triangle and negatively broke out below 6,215cps, triggering a sell signal.
SNH has reversed a few points away from our target at 5,050cps. With the 3-week RSI attempting to recover from a mega-oversold position, we advise investors to close short positions. However, a reversal below 6,215cps would present another short opportunity.
Gains through 6,215cps would mark a change in bearish sentiment - triggering a neutral long, with the first target situated at 6,950cps. In this case, stay long on continued upside as the next resistance at 7,750cps may well be tested.
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.