Long term levels matter. In this case, 3700c was key for Sappi, which, if you extended your lookback period, was a long term buy zone. On 12 September, I published a client report titled: "Technical Insights & Perspectives: 25 Key Charts". In fact, the report was public as I posted it to my Twitter and LinkedIn account on that same Sunday afternoon.
The thesis at the time was as follows:
Sappi Ltd (SAP, 4096c) - Monthly Chart. Key Takeaway: The ~3700c area has been an important historical level. The current consolidation is reminiscent of the period July 2014 to September 2015. Extending our lookback period, we note the 3700c level being a key demand/supply zone. Here, we also note the price having consolidated at this level on two occasions since 2005, following which rebounding off this area, resulted in a multi-month advance. The current level sees a similar consolidation. Here, a breach of the downward trend line extending back to the peak of September 2018 would suggest a potential continuation of the long term bullish reversal from the March 2020 lows. Provided the monthly chart/candles price action improves, this may be one to watch as a continuation trade following a strong move off September 2020 base.
Following the post (with SAP at 4096c), we saw a move to 3700c before a strong rally to the recent highs of 4737c for a 28% move.
Congrats if you got in and held...
For more real-time insights and trade ideas, get in touch today...
The thesis at the time was as follows:
Sappi Ltd (SAP, 4096c) - Monthly Chart. Key Takeaway: The ~3700c area has been an important historical level. The current consolidation is reminiscent of the period July 2014 to September 2015. Extending our lookback period, we note the 3700c level being a key demand/supply zone. Here, we also note the price having consolidated at this level on two occasions since 2005, following which rebounding off this area, resulted in a multi-month advance. The current level sees a similar consolidation. Here, a breach of the downward trend line extending back to the peak of September 2018 would suggest a potential continuation of the long term bullish reversal from the March 2020 lows. Provided the monthly chart/candles price action improves, this may be one to watch as a continuation trade following a strong move off September 2020 base.
Following the post (with SAP at 4096c), we saw a move to 3700c before a strong rally to the recent highs of 4737c for a 28% move.
Congrats if you got in and held...
For more real-time insights and trade ideas, get in touch today...