BOTTOM LINE: WHL has breached a support trendline dated back to 2011
(Click image to enlarge)
After bouncing on its major support trendline and key support level at 6,210cps in December 2016, WHL regained upside but encountered resistance at 7,695cps. It then pulled back again - extending its short-term bear trend - and is now re-testing the 6,210cps pivotal level.
Because the 3-week RSI is mega-oversold, we expect WHL to rebound soon. However, failure to trade beyond 6,940cps would increase the chances of WHL breaching key support and abandoning its long-term bull trend. If so, go short below 6,210cps, and the target would be at 4,730cps.
A move through 6,940cps could prompt further gains to 7,695cps. The resistance trendline of the current bear trend would then be breached above 8,120cps.
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.