JSE stalwart Remgro has been consolidating sideways for almost five months but the investment company’s share price has now given an upside breakout. Its chart points to two higher targets to come.
Remgro: Upside breakout
Trend: Short term up. Medium term turning up. Long term up.
n Remgro has formed a medium-term symmetrical triangle (lines 1 and 2) and broke out above line 2 last week. It has also formed a short-term inverse head and shoulders (labelled S-H-S).
n The short-term stochastic oscillator (on top) is overbought, so the price may stall temporarily, but there is at least still one significantly higher target in place.
n Buy it for the medium term (three to six months). Buy ideally on a one- or two-day pullback.
n The first target (T1) is nearby at R197.50, based on the height of the inverse head and shoulders projected up. Target two (T2) is R216, based on the height of the triangle projected up.
n While shorter-term traders place your stop loss as a close below R188.50, medium-term players keep it below line 1, for example a close below R183.
Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or to attend his courses, please go to www.themarket.co.za.