Assore has been one of the only resources stocks that has been in a solid uptrend over the past 12 months.
The mining firm’s price is consolidating before a new breakout, which is likely to be to the upside again
Trend: Up on all main timeframes.
Strategy: Buy as close to line 2 as possible, or above line 3, whichever happens first.
n Over the past 10 days, Assore has moved sideways in a small channel or flag pattern (lines 2 and 3), which is a temporary pause before continuing higher again.
n Its short-term stochastic oscillator (on top) is moving up again (bullish), after pulling back slightly to help relieve its prior overbought condition .
n It is to be bought by traders. Buy ideally as close to line 2 as possible (R422). But at the very latest, buy (or add to holdings) on a closing price above line 3 (R434.50). Buying on the pullback here is preferable.
n The minimum price target is R450 in the short term. Take half profits from there and then use a breaking of its prior one-day low as the stop on the remainder of your position (to allow for further upside).
n If buying near line 2, place your stop-loss as a close below line 1 (R415). But if buying on the breakout above line 3, place your stop below line 2 as a close below R421.
Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend his courses, go to www.themarket.co.za.