Extract from a note published earlier today.
Over the years, I have done well to call the direction of Impala Platinum (IMP), most of which has been to help our clients and followers of my work identify key levels and understand the prevailing reward-to-risk.
While I’ve also had several short term (CFD) trade ideas for our active traders, I will focus on the long term, structural calls.
On 18 September 2018 (at 1926c), I presented my perspective of the MONTHLY CHART. After the market close on that day, I publicly tweeted the chart to my followers/connections.
See the original tweet below (time-stamped).
On 14 May 2021 (nearly 2 years ago) I again tweeted about the share, highlighting the potential for downside risk. Most of us know that IMP hasn't been able to crack the R300 level, with sellers pushing the share close to R140 last year while the last close was around R166.
See the original tweet below (time-stamped).
Where To Next for Impala Platinum?
In the weekly chart below, the following is displayed:
Upper Panel: IMP share price
Lower Panel: IMP distance vs 200-Week Simple Moving Average in Pct Term
Click to enlarge
We know that the long term supply level has been around R250 to R290. These levels were also relevant in 2007 and in 2011 (no coincidence). At current levels, the share is potentially breaking down from a 2-year topping structure.
While these levels may be widely know, it's the lower panel that has piqued my interest. Flipping through my charts this morning here’s what I saw:
Note the price distance vs the 200-w SMA has slipped below zero percent? This is a similar development to what we saw in September 2008 where the negative reading coincided with the start of a multi-year bearish trend. Yesterday we saw Northam holding back on their dividend which saw a strong intraday sell-off. Is this a read for the entire sector or is it confined to NPH who, along with IMP, is involved in some corporate action (re: RBP).
Bottom Line: While these businesses are in a much better condition these days and platinum is due to go into a deficit, the smallest of such technical signals mentioned above may be worth paying attention to. As always, technical analysis should not be seen as a predictive tool, but rather a risk management tool.
Over the years, I have done well to call the direction of Impala Platinum (IMP), most of which has been to help our clients and followers of my work identify key levels and understand the prevailing reward-to-risk.
While I’ve also had several short term (CFD) trade ideas for our active traders, I will focus on the long term, structural calls.
On 18 September 2018 (at 1926c), I presented my perspective of the MONTHLY CHART. After the market close on that day, I publicly tweeted the chart to my followers/connections.
See the original tweet below (time-stamped).
On 14 May 2021 (nearly 2 years ago) I again tweeted about the share, highlighting the potential for downside risk. Most of us know that IMP hasn't been able to crack the R300 level, with sellers pushing the share close to R140 last year while the last close was around R166.
See the original tweet below (time-stamped).
Where To Next for Impala Platinum?
In the weekly chart below, the following is displayed:
Upper Panel: IMP share price
Lower Panel: IMP distance vs 200-Week Simple Moving Average in Pct Term
Click to enlarge
We know that the long term supply level has been around R250 to R290. These levels were also relevant in 2007 and in 2011 (no coincidence). At current levels, the share is potentially breaking down from a 2-year topping structure.
While these levels may be widely know, it's the lower panel that has piqued my interest. Flipping through my charts this morning here’s what I saw:
Note the price distance vs the 200-w SMA has slipped below zero percent? This is a similar development to what we saw in September 2008 where the negative reading coincided with the start of a multi-year bearish trend. Yesterday we saw Northam holding back on their dividend which saw a strong intraday sell-off. Is this a read for the entire sector or is it confined to NPH who, along with IMP, is involved in some corporate action (re: RBP).
Bottom Line: While these businesses are in a much better condition these days and platinum is due to go into a deficit, the smallest of such technical signals mentioned above may be worth paying attention to. As always, technical analysis should not be seen as a predictive tool, but rather a risk management tool.