16 finweek 19 March 2020 http://www.fin24.com/finweekmarketplace killer trade
By Moxima Gama52-week range: R1065.21 - R1497.
Price/earnings ratio: 25.
1-year total return: 3.74%
Market capitalisation: R149.6bn
Earnings per share: R49.
Dividend yield: 1.45%
Average volume over 30 days: 244 651
SOURCE: IRESS52-week range: R150.86 - R280.
Price/earnings ratio: 5.
1-year total return: -36.62%
Market capitalisation: R76.55bn
Earnings per share: R26.
Dividend yield: 9.19%
Average volume over 30 days: 1 645 223
SOURCE: IRESSCAPITEC
NEDBANK
CAPITECNEDBANKc
apitec’s share price
has surged more than
320% over the past
five years. The lender
said on 9 March that it expects
its headline earnings per share for
the year ended 29 February to
be between 18% and 21% higher
than the comparable period a
year earlier. The bank said it plans
to release its financial results on
or around 14 April.
Outlook: Capitec has been
encountering major resistance
at its all-time high at 149 500c/
share and retaining key support at
132 500c/share since December- With investor sentiment
currently subdued, will the lender’s
forecast results avert a potential
topping-out bearish formation?
On the charts: Capitec is forming
falling highs and during the final
week of February it breached key
n
edbank, SA’s
fifth-largest
bank by market
capitalisation and
fourth-largest by total assets,
said at the beginning of March
that its headline earnings
declined by 7.3% for the year
through 31 December. It also
plans to freeze increases for its
top executives to withstand
the prevailing tough economic
environment. The lender ascribed
the weak profit performance
to a weak economy at home,
rising impairments and several
once-off items that have hurt its
performance.
Outlook: Nedbank ended its
long-term bullish streak at
the beginning of the year after
revising down SA’s GDP growth
forecast for 2020 to 0.7% and
warned that the outlook could
worsen if electricity supplysupport at 132 500c/share when
the entire market plummeted
over the global spread of the
coronavirus. It recovered some of
those losses during the first week
of March. However, a reversal
below 142 395c/share – thereby
forming another falling top –
could trigger downside through
key support at 132 500c/share
again, thus commencing thedeteriorated further. Nedbank
has confirmed a negative
breakout of its bull channel by
trading through the 19 800c/
share support level.
On the charts: With the three-
week relative strength index
(3W RSI) in oversold territory,
Nedbank’s share price should
recover soon. If so, upside
towards either 19 800c/share or
22 355c/share could then follow.topping-out pattern.
Go short: Breaching support
at 132 500c/share again could
prompt a correction towards
117 885c/share. This momentum
could extend below 109 800c/
share to either the lower slope
of its long-term bull channel or
the 100 000c/share support
mark. Investors are advised to
reduce long positions by a largeGo short/stay short: Investors
who are looking to sell should
wait for the near-term recovery,
triggered by the oversold 3W RSI.
However, failure to trade beyond
22 355c/share in the next few
weeks could trigger another sell-off- potentially extending the current
bear trend towards 15 500c/
share. Below that level, Nedbank
may capitulate further to the next
support situated at 11 900c/share.
percentage below 132 500c/
share.
Go long: Capitec’s share price
would have to recover above
149 500c/share to retain its
long-term bull channel. The upper
slope of its channel could then
be revisited. However, it may also
curb further gains. If not, a new,
steeper bull trend would form to
new all-time highs. ■Go long: Nedbank’s share price
would only resume its previous
bull channel above 22 355c/
share. Thereafter, it could regain
its losses towards the 31 650c/
share all-time high. ■
[email protected]Upside losing steam
Wait for recover y
Moxima Gama has been rated as one of the
top five technical analysts in South Africa.
She has been a technical analyst for 12 years,
working for BJM, Noah Financial Innovation
and for Standard Bank as part of the research
team in the Treasury division of CIB.SOURCE: MetaStock Pro (Reuters)SOURCE: MetaStock Pro (Reuters)