On the daily chart, we can see how the stochastic is in overbought territory and is now starting to reverse downwards. Also noteworthy is the fact that price has retraced off its 05 Oct low to the 61.8% retracement level where a bearish engulfing candle has not forced it back downwards.
Finally on the support and resistance graph we see that price is reversing off a fairly strong lateral resistance level around the R132.00 mark and there is some good headroom for a move down to the rising support level going back to late July.
Our setup is thus as follows. Look to sell short around the current R130.00 level with a stop in as a close above R132.50 and a target at R125.00. This would yield a 2-1 reward-risk with a potential to improve on a better intraday entry.
The stock offered a decent entry up to R130.25 as it started its bounce off the resistance ceiling today
ReplyDeleteWith this stock breaking through resistance fairly comprehensively, the stop should have triggered and the position closed out by latest end of day today. The maximum tolerable loss should be some 2.1 x risk which is relatively high in relation to original risk but not a train-smash
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