| |
Exxaro, Aveng look bullish
Colin Abrams
Posted: Wed, 09 Apr 2008
[miningmx.com] -- TWO interesting charts of Top 40 index stocks are lining up for good rallies. The first is Aveng, in the construction sector. The other is Exxaro, a diversified resources company.
While both are in different sectors - and are affected largely by different fundamental factors - their respective charts are pointing to profitable opportunities.
Aveng is currently testing an important resistance level and a breakout can occur at any time. And Exxaro has pulled back to an oversold - ie, bullish - level.
AVENG - BREAKOUT POTENTIAL
Click on image to enlarge
Trend: Up, but short term overbought.
Strategy: Prepare to buy.
* Aveng is trading in a large broadening formation (lines 1 and 2). At the time of writing Aveng is breaking out above line 2 (R61) - a very bullish event.
* However, the short-term stochastic oscillator (on top) is overbought, so a minor pullback is very likely before more upside.
* Buy it on either a closing price above line 3 (R62,50) or on a pullback towards R57. Do whichever of those events happens first.
* Once it closes above R62,50 it will set up a minimum upside target of R82 (measured as the height of the broadening formation projected up) over the medium term. Take profits as that level is neared.
* Place your initial stop-loss (if buying on a pullback to R57) as a close below R54. But if buying on the breakout above line 3 your stop will be a close below R57,50.
EXXARO - OVERSOLD
Click on image to enlarge
Trend: Short term down, but oversold. Medium/long term up.
Strategy: Prepare to buy.
* Exxaro, one of the market leaders, is pulling back towards line 2 support at R106 to R107.
* The daily stochastic oscillator is in the oversold region and a new rally can begin at any time.
* Buy on either an upward reversal off line 2 (R106 to R107). Or buy on a close above line 3 (R116). Do so whichever of those events happens first.
* Once the upward breakout occurs, look for a move initially to R124 (lock in a third of your position there). Lock in another third as the price nears its all-time high of R134,50 and use a breaking of the prior three-day low as your trailing stop to allow for further upside (to R140). However, the long-term target is R170.
* Place your initial stop as a close below R105 (if buying on a pullback) and below R109,50 if buying on the breakout.
Please note: For more recommendations and charts by the author on shares, indices and commodities please go to www.themarket.co.za.
| |
2% 
;)
;)
