ARC Investments falling wedge breakout false or sustainable?
After falling to lows of R1.92 in March 2020, JSE:AIL began its upward journey and got caught in a trading range between R4.72 and R8.00 from November 2021.
The share closed at R6.01 yesterday after breaking out of a falling wedge it had been painting from 30th March 2023 within the trading range. The first signal of a build up of bullish momentum was when price painted lower lows between 26th July 2023 and 23rd August 2023 while the DAILY RSI was painting higher lows, a clear bullish divergence.
Looking at the currrent breakout, price closed at R6.17 on Friday the 15th of Sep, closing well above the 50 Day EMA and had some profit taking on Moday the 18th which saw the R6.01 close, still slightly above the 50 Day EMA. The 21 Day EMA has still not yet crossed over above the 50 Day EMA however it is pointing up.The Daily RSI is pointing down around the neutral zone but is above its smoothing line.
So long as price finds support around R5.88, we could see a strong bullish break of R6.17 which could see price journey to test R8.00 levels and reach further to R9.10.
Aggressive long entries could be taken as R6.17 is broken and conservative long entries would be after the 21 Day EMA crosses the 50 Day EMA, which will most likely be above R6.41.
if the zone around R5.88 fails as support and turns into a resistance, the instrument could see price tumble to R5.20 and lower to R4.72 ~ R4.95.
The share closed at R6.01 yesterday after breaking out of a falling wedge it had been painting from 30th March 2023 within the trading range. The first signal of a build up of bullish momentum was when price painted lower lows between 26th July 2023 and 23rd August 2023 while the DAILY RSI was painting higher lows, a clear bullish divergence.
Looking at the currrent breakout, price closed at R6.17 on Friday the 15th of Sep, closing well above the 50 Day EMA and had some profit taking on Moday the 18th which saw the R6.01 close, still slightly above the 50 Day EMA. The 21 Day EMA has still not yet crossed over above the 50 Day EMA however it is pointing up.The Daily RSI is pointing down around the neutral zone but is above its smoothing line.
So long as price finds support around R5.88, we could see a strong bullish break of R6.17 which could see price journey to test R8.00 levels and reach further to R9.10.
Aggressive long entries could be taken as R6.17 is broken and conservative long entries would be after the 21 Day EMA crosses the 50 Day EMA, which will most likely be above R6.41.
if the zone around R5.88 fails as support and turns into a resistance, the instrument could see price tumble to R5.20 and lower to R4.72 ~ R4.95.