Cup-and-handle pattern on Shoprite
Shoprite hasn't had the best year. In March it created a high of R281.90 and then proceeded to crash all the way to R174.50. Interestingly enough however, Shoprite has created a cup-and-handle pattern over the past two months.This is a common bullish pattern and indicates a change in trend.
If you look at the chart above, you can see how
Shoprite formed the "cup" part of the pattern during September and October. This was followed by a slight correction in November which created the "handle".There is also a clear bullish divergence on the MACD. For this reason I will be going long.
Action: Place a Limit order to BUY at R205 with a Stop Loss set at R190. I will aim to take profit at R220 and R230 respectively.
Margin: 10%
Gearing: 10.00x
Gain: +121.95%
Risk: -73.17%
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