SLM trade ideas
Relative Ratio: JSE Insurers vs JSE BanksThe following content is an extract from this morning's client research.
In terms of single stocks, one of my ideas is a local pairs (market neutral) trade idea from the commodities/mining sector. For more insights and real-time ideas, or if you are considering an alternative trading services provider get in touch today.
Another chart/insight published to clients is the attached ratio chart highlighting the performance of JSE Insurers vs JSE Banks. I think this ratio/relative chart is something we need to pay attention to over the medium term , especially from a relative sector allocation perspective.
Text as follows:
"JSE Insurers (Equally-Weighted) vs JSE Banks (Equally Weighted) | The daily chart shows insurers potentially starting to outperform vs banks as it develops a double bottom formation while the weekly 14-period RSI (lower panel) shows the indicator printing a positive divergence."
Disclaimer: The above content should not be considered an investment recommendation.
SANLAM - Buy Long Idea- After the previous trade going to take profit, price and retreat back to a level which presents a good opprtunity to go long again
- SL and TP on the chart
- Previous trade in link below
-- MANAGE YOUR RISK - -
Disclaimer: All ideas are my opinion and should not be taken as financial advice.
Sanlam limitedI've taken a position in Sanlam at R62.52, expecting it to break 20% to the upside within the next 6 months.
I have a stop loss at around R54 - which will confirm a lower low.
At the moment, I am seeing an ascending triangle formation with strong resistance at R65, and higher lows after each pullback.
I believe it will break to the upside as this is a bullish.
Let's see how it plays out.
Long idea on SLMThere is a nice ascending triangle setup forming here. Price is currently testing the 200WEMA which is acting as resistance with the trend line, A close above 6500 and a long position can be initiated with a ST limit at the Jan2020 highs at 7880. This trade has good RR, and the LT trend is still up. As always manage your risk. Good luck out there
Ascending triangle still in the makingSLM is still within it's ascending triangle formation with a potential to test the lower trendline. Short term R60 seems to have held but a move close to R58 could be a good entry with previous swing lows at R54,40 as a stop loss while a move above R65 will trigger the breakout on this pattern.
Some wind behind SanlamLooking at the daily chart there’s quite some wind behind this trade. We have a combination of a golden cross, a pull back to the 50 day EMA that holds, inverse head and shoulders pattern, the right shoulder forming a falling wedge. Plus the cup and handle pattern from the weekly chart. I will start building my position on the break through the neckline close above R63 with a stop loss just below the right shoulder and falling wedge, around R60. I’m considering starting to build the position on the break of the falling wedge, but a half the risk. Starting the trade with a 0.5% risk and putting a full position on the break of the neckline and the close above the high close of the falling wedge at R64.90. Unless the break of the falling wedge also breaks the neckline in which can I will put on a a full position (1% risk)
Sanlam Last week Thursday (pre-market) our tactical perspective suggested: "Aggressive Buying But Do Not Chase-Look For Overshoot and Failure To Hold Highs To Short-Sell Back To The 8-EMA" - see related.
The price has since has since retreated, but may be heading lower, setting up a potential rebound buy for ultra short term or day traders.
What's the range to buy? I'm looking at around 5940c down to 5880c, using a stop-loss of 5805c.
It's an ultra short term idea, so let's remain nimble.
SanlamThis morning, our tactical model for SLM suggests the following: " Aggressive Buying But Do Not Chase-Look For Overshoot and Failure To Hold Highs To Short-Sell Back To The 8-EMA ".
A manual review of the chart notes the price at a clear supply zone however we know it has the ability to overshoot.
If it trades above resistance and fails to hold, does that set up a short term short/sell ? I'm monitoring for entry.
Note: the 7 and 14-day RSI's trade at 80 and 74 respectively - strong but nearing 'short term overbought'.
SA Banks & Financials packing their bag for a short trip south Well, everything on the globe is being marked down, and this includes SA banks & financials, despite much improving underlying fundamentals.
Prices for all of them are now under their 5EMA which is under their 15EMA. In this weak sentiment environment I'm looking for them to give back another 5% or so before bargain hunters like myself can't resist the risk. JSE:SBK target the R113-R115 area JSE:FSR target R48ish JSE:ABG target R116-R118 JSE:NED who knows and even JSE:CPI looks ready to retrace to the R1450 area.
Conversely stated, in the current environment the probability of these counters going up 5% is a LOT lower than them going down 5%.
In the background the fundamentals are improving - manufacturing data, bankserv transaction data, etc - so if they do dip nicely that would present a great opportunity to buy, imho. In short, take your profits and fall back :-)
Happy trading!
UC