This morning, pre-market, I published a technical note focusing specifically on key levels for JSE PGM and Gold shares, what the medium term outlook is and whether or not they are a buy at current levels.
One of my main comments were: 'at some point these names will be opportunities for the mean reversion trader.'
As you know I consider the chart in various time frames and from various angles as a technically-focused analyst is supposed to, with the monthly chart having the highest priority.
For ANG and it's peers, it reminded me of May to July 2020, when these names were trading at massively elevated levels.
One of my main concerns at the time was that the constituents had advanced significantly. ANG itself was +430% from it's May 2018 low (at the time, a massive move in two years).
My focus was the monthly chart, using the indicators, extension and peaks to come to the conclusion that a pullback was imminent (see attached short idea on ANG dated 18-May-2020).
From above R500, the price dipped before advancing to trade above R600 and then beginning it's multi-month decline to R232 at today's close (that's a -62% downside move from the July 2020 peak)). In between there has been tactical (short term) trading opportunities on both the long and short side.
For those traders, or more so investors with longer time horizons, a focus on the monthly chart at the time may have helped to manage risk by shifting capital to a better-suited opportunity within a larger portfolio.
Possibly, the questions you may want to ask yourself is:
- What are you doing to manage risk from a technical perspective?
- Is your PM controlling the risk with effective tools?
- Do you think an alternative technical perspective could add value to your own process?
If you need help navigating the market, with a diverse and experience technical perspective, get in touch today.
One of my main comments were: 'at some point these names will be opportunities for the mean reversion trader.'
As you know I consider the chart in various time frames and from various angles as a technically-focused analyst is supposed to, with the monthly chart having the highest priority.
For ANG and it's peers, it reminded me of May to July 2020, when these names were trading at massively elevated levels.
One of my main concerns at the time was that the constituents had advanced significantly. ANG itself was +430% from it's May 2018 low (at the time, a massive move in two years).
My focus was the monthly chart, using the indicators, extension and peaks to come to the conclusion that a pullback was imminent (see attached short idea on ANG dated 18-May-2020).
From above R500, the price dipped before advancing to trade above R600 and then beginning it's multi-month decline to R232 at today's close (that's a -62% downside move from the July 2020 peak)). In between there has been tactical (short term) trading opportunities on both the long and short side.
For those traders, or more so investors with longer time horizons, a focus on the monthly chart at the time may have helped to manage risk by shifting capital to a better-suited opportunity within a larger portfolio.
Possibly, the questions you may want to ask yourself is:
- What are you doing to manage risk from a technical perspective?
- Is your PM controlling the risk with effective tools?
- Do you think an alternative technical perspective could add value to your own process?
If you need help navigating the market, with a diverse and experience technical perspective, get in touch today.
