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Views Article – Sharenet Wealth

South Africa

Kumba Iron Ore Ltd: Further Gains Are Underway

BOTTOM LINE: KIO has broken out of its long-term bear trend

(Click image to enlarge)

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Possible scenario:

We had recommended a long position in November last year, and KIO confirmed a positive breakout of its inverted head and shoulders pattern above 13,300cps. After testing our first target at 17,710cps, we suggested investors close positions because the 3-week RSI was overbought – and then go long on a recovery.

Our second target was at 19,965cps, and KIO is trading above that level. Despite the overbought RSI, we expect KIO to trade towards 25,835cps, so stay long or go long.

Alternative scenario:

Close positions on a reversal below 15,260cps. Downside to – and possibly through – 13,300cps could ensue.

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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.

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