BOTTOM LINE: WHL breached the lower slope of its channel and tested a support trend-line dated back to 2011.
(Click image to enlarge)
WHL then bounced on that major support trend-line, as the 3-week RSI recovered from a mega-oversold position. The resistance encountered at 7,250cps had triggered a reversal - the RSI formed a lower top. But now that WHL has returned to that resistance level and the RSI has ticked upwards, a close above 7,250cps this week would trigger a buy signal the following week.
Ensure that the RSI has traded through the red bold trend-line above that level before going long. Such a move would mean WHL has bounced on its major support trend-line again, and that a gradual upside towards 8,700cps would be possible.
A failure to close above 7,250cps this week would be a bearish sign. A downside to 6,495cps could ensue, and a neutral short would be triggered below 6,210cps towards 5,485cps. A negative breakout of the long-term bull trend would be confirmed below 5,485cps - another short signal with the first target being at 4,500cps.
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.