Technical analysis: Capitec breaks out of two-year drift

After moving sideways for the past two years, Capitec has now given a new upside breakout. We show this on its chart and discuss upside price targets for it.

Capitec: Bullish breakout

Recommendation: Medium term buy

Trend: Short and medium term up.


- After moving sideways to reach its 200-week moving average, Capitec has finally broken out of a large channel (lines 1 and 2).

- Its weekly stochastic oscillator is in an overbought zone, which is a short-term caution. However, the force of a two-year sideways range should continue to push this stock significantly higher.

- Start buying part of the position now, that is, half, and add to the position on any correction that we might get, closer to line 2 at R213.50.

- The minimum target is R263.70, based on the height of the channel projected up. Other methods are showing targets of R283 and eventually R328.

- The initial stop-loss is a daily closing price below R202, as part of a medium-term or longer trade. Once the price gets to R242 bring the stop up to below R210. Take partial profits at the R263.70 target, and raise the stop again.