ArcelorMittal South Africa had the biggest two-day rally in almost four years in Johannesburg trading yesterday on speculation that a drop to the lowest level since 2003 was overdone.

The shares in Africa’s biggest steel maker climbed as much as 9.1 percent to R30.64 by 2pm, taking the increase over two days to 20 percent, the most for this period since November 28, 2008. The shares closed 6.8 percent up at R30.

The stock had fallen for 12 consecutive days to Tuesday, when the company announced Matthias Wellhausen would replace Rudolph Torlage as chief financial officer.

The 14-day relative strength index on the stock was below 30 from November 7 to Tuesday. A reading below that level is a signal to technical analysts that the price is poised to appreciate.

“It was oversold and now the market realises that,” Mohamed Kharva, an analyst with Nedbank Securities, said. “People overreacted to the [chief financial officer] announcement.”

Torlage would now “focus on projects of a strategic nature”, the company said on Tuesday. The stock fell to the lowest level since November 2003 on the same day.

Meanwhile, ArcelorMittal SA has agreed to sell its 50 percent interest in Kalagadi Manganese for $447 million (R4 billion) to Daphne Mashile-Nkosi, its South African partner in the producer of the steelmaking ingredient.

The companies were in dispute over ArcelorMittal SA’s shareholder obligations.

“The stock got hammered when the chief financial officer was replaced, plus many steel businesses around the world have tanked,” Campbell Parry, an equity analyst at Investec who has a sell recommendation on the stock, said.

“It’s probably worth around R30 so this is opportunistic buying.”

ArcelorMittal SA has retreated 56 percent this year. South Korea’s Posco, Asia’s third-largest steel maker, has declined 19 percent.

The South African company’s 30-day historical volatility, a measure of stock swings, increased to 58 on Wednesday, the highest since April 2010.

The all share index’s 30-day volatility measure was at 9.2 compared with 8.9 on Wednesday.

A higher reading means an asset’s price can have bigger moves.