Trading Ideas

Coronation…a recovery on steriods currently

$JSECML…a recovery on steriods currently by SchalkLouw on

Great recovery coming from Coronation, with another +/- 5% run again today, bringing the YTD performance now to double-figures. After the 20-day moving average broke above the 50-day on the 4th of March, the trend definitely became a bit stronger and now look a lot healthier. The 14-day RSI is closing in on the 70 mark, which does place the share now close to short-term “oversold” territory. I’m however already long, with a longer view on the company. I’m therefore not going to be too phased about any short-term noise for now. My target for now is both the 200-day moving average at R50.25, which is also the 0.236 Fibonacci retracement resistance level . A break above this level, could see us test R57 again.

Should we see a reversal in the trend, my first alarm bell will ring at R41.50 (50-day moving average), with huge horizontal support at R39.15. A break below this level does spell serious trouble, with the diagonal trend line at R36.25 then coming into play.

I’m still happy with the Thomson Reuters consensus target of R54 and with a historic Dividend Yield of 9.7% currently, I’m still very happy with this position.

Schalk Louw
As Portfolio Manager at PSG Wealth Old Oak and with over 20 years’ experience in the investment industry, Schalk has consistently delivered solid returns to his clients and has certainly become one of South Africa’s most well-known strategists. He started his career in 1994 at the stockbroking company, Huysamer Stals (later ABN Amro). He joined SMK Securities in 1997, (later became BoE Personal Stockbrokers) and was later appointed as director and branch manager. In 2001 he co-founded Contego Asset Management and managed the company as CEO up to March 2014, after which he joined PSG Wealth Old Oak. Schalk has also become a regular household name with investors, with his reports being published in many of the national press. He completed his MBA in 2008.

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