$JSECLH City Lodge Hotels Ltd - Is A Bottom Finally In?CLH made an all time low in November 2020 and bottomed at R2,22 per share.
Amidst covid-19 uncertainties, travel restrictions and registering operational losses, the share price gradually made its way to a peak a year later at R6,50.
The advance, with overlapping 5 waves, is a textbook leading diagonal which is bullish base for further upside.
The leading diagonal is found in wave 1 of impulses and wave A of zigzag corrections, in this case, it is the former.
Since the R6,50 peak, the share price has been under pressure due to new variants of the covid-19 and continues operational losses.
The correction though has been relatively sideways and on low volume which shows the bears have been in a non-aggressive mood.
The correction itself is a textbook 3 wave (abc) and has held well above the R2,22 low.
Now, we are seeing a return to normal life, sports stadiums are full and there are little travel restrictions.
This is good for travel and leisure and this bodes well for CLH for growth off a low base.
Occupancy levels are already close to 2019 average levels.
In the short-term, a key level to watch is R3,85 and price action is already showing signs of a turnaround.
On the daily chart we have the following bullish indicators:
MACD above the zero-line and building momentum
Price trading above 50-day EMA
*City Lodge is expected to report its full year results in September.
CLH trade ideas
City Lodge- Long Stay tradeCity Lodge (CLH) - Upper resistance
R6.50 - Price has just smashed through the 50 day Moving average and looking bullish. We're long here at 5.43 for a bounce. It might also pay to hold this one a bit longer because if occupancies improve (which they should), we should see the stock aim much higher.
City Lodge - Continuation Long?The attached chart is an extract from today's report which includes:
1. US Market Snapshot - As At Friday's Close: Sectors, Fixed Income, Factors, Yields and More
2. Top of the Week - Analyst Thoughts
3. Leaders & Laggards
4. Pre-market thoughts
5. All Country World Equity Index (ACWI)
6. S&P 500 Futures
7. Credit Spreads
8. JSE Platinum & Precious Metals (Equally-Weighted) vs JSE Top 40
9. Mr Price (MRP)
10. Sanlam Ltd (SLM) - ST Chart
11. Sanlam Ltd (SLM) - LT Chart #1
12. Sanlam Ltd (SLM) - LT Chart #2
13. Glencore Plc (GLN)
14. City Lodge Hotels (CLH)
15. Bank of America (BAC)
16. Home Depot (HD)
17. Altria Group (MO)
18. General Dynamics (GD)
19. Dow Inc (DOW)
20. Anthem Inc (ANTM)
21. Autozone Inc (AZO)
22. First Trust Global Commodity Tactical Strategy Fund
23. TRADING TOOLBOX: Using Scans To Identify Trading Opportunities
24. Social Media Market Sentiment Polls
25. Scan: Positive & Negative Gaps
26. Scan: Strong & Weak Into Close
27. Scan: Close at High/Low of Day
28. Scan: Positive & Negative Closes Sorted By Relative Volume
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PLEASE NOTE: Our preference is to respond to trading opportunities in real-time, using an opportunistic and flexible approach as prices may be influenced by additional market data, news and changes in price action/structure. All data and charts are as at the close of Friday 28 January 2022 and represent a best probability plan and perspective. In addition, levels within this report are subject to change based on the aforementioned while the research/ideas are not a comprehensive view of all market conditions at the time of writing.
JSE:CLH City Lodge AccumulationSince the lows, in March 2020 City Lodge Hotels has seen increased trading volume on the JSE at the 320 level and below. We have now seen a pullback to this level which is also the 50 and 200daySMA with increased volume significant bar. This looks like the markup in Phase D of the Wyckoff trading range and we can expect this to continue to the top of the trading range at the yearly pivot point around 670. After a test of this level, we will look for a breakout of the trading range and the markup in Phase E to begin.
City Lodge Hotels analysis CLH showing a gradual increase from peak bottom of R2.30 and currently sitting at R4.00.
In increase from this point to R6.00 resistance would yield a 50% increase although it would be a long risky ride. Share price is still a fraction of what it once was but lets not forget the share price has been on a downtrend even before the first covid lock downs. The all eyes are on vaccine roll out s the bet or the gamble would be on a covid free world and increase in tourism traffic which is almost likely to happen. Seeing the levels at which CLH as maintained this low being very reluctant to go below R2.30, this could be a lucrative bet. I would be doing a fundamental analysis later on to see the full picture wether it would be worth the risk of jumping in. But overall i have a positive feeling.
City Lodge Analysis City lodge had a really good week, starting at just under R2.40 and ending off at R3.16. A growth of about 32% in a week. Possibly reacting the the good news of the vaccine announced. Despite a strong showing this week, its still a far cry from the R16.00 price point we started the year with and thus City Lodge still has a long way to go.
An interesting note though is that even before Covid or the lock down, City lodge had a consistent declining share price spanning over a couple of years. It will take a really good turn around in terms of business management and healthier financial statements for us to see a worthwhile reversal. Comparing this weeks rise to the overall chart over years, the 30% gain is a mere spec.
We are currently above the 2.90 support line thanks to this weeks rise but i think it would be fair to expect the share price to go below this again after the excitement has died down a bit.
City Lodge Analysis As a share holder of this stock, i have become numb. And thats a good thing because now I can hold indefinitely. Recovery of City Lodge could have really good returns. For now it seems fluctuations are slowly dying down. At this point we hope for some good news that could send the share price rocketing. The hospitality industry doesn’t seems to have reacted very positively since lighter regulations where introduced but for now we just play the waiting game. I may possibly expand on City Lodge but I wont discount how risky this move will be.
My hope is the rights issue doesn’t come to naught.