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Vodacom Group Ltd: 3-Week RSI Is Mega Overbought

BOTTOM LINE: VOD confirmed a bullish reversal pattern

(Click image to enlarge)


Possible scenario:

After breaching the neckline of its inverted head-and-shoulders pattern and confirming a positive breakout above 15,975cps, VOD surged and exceeded our first target situated at 18,100cps. With the 3-week RSI in mega-overbought territory and VOD almost testing the upper slope of its channel – which it has failed to breach a few times – a near-term correction is pending.

We recommend investors revise and possibly close long positions once the RSI ticks downwards. If the RSI remains bullish, and VOD holds at 16,775cps, another buying opportunity would be presented.

Alternative scenario:

A downside through 16,775cps could see VOD retrace further, to either the red bold trendline or the 15,530cps support level.



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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