Sappi (SAP) took a hit after shock Q2 results yesterday. A late afternoon reversal saw the stock trade 4% off the low, indicating some buyer interest near the R60.00 level. The market has clearly decided to price in poor Final results (Sep 19) in one day so I think a relief rally is most certainly possible.
From a technical perspective, yesterday's late reversal had still honored horizontal support which i would use as an entry level "zone" to get in. Weak hands are still being flushed out so I wouldn't be surprised to see R55.00 on the bid. In a case a like like this, i would keep a stop loss quite wide and the trade size a bit smaller than normal. With the market having priced in the worst (in my opinion) the potential upside reward on a long trade outweighs the downside risk. Before yesterday's move, I had major resistance at around 83.00, however, after yesterday's sell-off, I would now target R75.00 which is the new overhead resistance which still relates to around a 22% price move.