This week, the most noticeable thing to point out is the fact that 4 out of the top 5 most “overbought” companies are all Platinum mines. With the recent pullback in the Platinum price (in USD) and somewhat stronger Rand, I will caution any long positions in all four these mines over the shorter term.
We still believe that Richemont is a quality business, and if you don’t own any, could use these “oversold” levels to buy for example, half of your total portfolio weight. The 50-day moving average is still pointing downward, which indicates that the trend is still very much downward. Should we see further weakness, we could get some support at R97.60, where I would look to buy back the other half of my position.
Should we see a breakthrough R97.60 levels, we could see the share price seeking support at R92.50. Short-term traders would most probably use this level as their stop-loss as a break and close below these levels, breaking a 3-year support line.
Should we see a recovery in the share price from current levels, could see resistance firstly at the 50-day moving average (R107.52), with, next resistance being the 200-day moving average (R116.64).