BOTTOM LINE: BAT has breached the resistance trend-line of its long-term bear trend.
Still ranging between 4,500cps and 3,315cps, BAT is a few points away from major resistance at 4,500cps. A positive breakout of the sideways pattern would be confirmed above that level, triggering a good buy signal.
Because BAT has encountered major resistance there a few times before, the breakout could be rapid towards 5,150cps – so increase positions above that level. Resistance at 5,785cps could then be targeted.
BAT could fail to breach that 4,500cps level again, thus extending its sideways movement. Support at 3,315 could be retested, but only go short when that level is breached. BAT could then fall to 2,490cps.
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.