Absa Bank is looking strong even as the Rand and the JSE are looking weaker. Absa's pears in the Banking Sector are also looking weaker. Absa's relative strength to the Banking Sector is improving. There are a number of indications that Absa is going to buck the trend. The location in the accumulation structure is at a good place to go long. We have seen an accumulation trading range (TR) with a Selling Climax (SC), Automatic Rally (AR), Secondary Test (ST), A Spring, Last Point of Support (LPS) and now a Backup (BU) to the TR. An upward channel has formed and it is now testing the lower trend line which is also the 50 MA and the Yearly Pivot Point. Further, there is a negative divergence with the volume RSI which is a good continuation signal. Volume is increasing on up moves and decreasing on down moves. We need to watch how it reacts this week to the lower trend line and top of the TR to confirm if we are going to get a markup.
Comment:
The trendlines did not hold. However, the larger Wyckoff Trading Range (TR) is still looking like accumulation. Volumes have been low on the pullback. We are now at another decision point. Price is testing the 200MA which is also the point of control on the volume profile. There is a negative divergence on the volume RSI also pointing to a continuation.
