We have previously detailed the short position on Sasol (see linked idea), now we analyze the bullish case, Sasol price has diverged from Brent, brent is seeking a daily cycle high while Sasol is seeking a cycle low. Here we see a Hammer candle forming at the point of the 0.50 retracement of downtrend. This area is also a support level set by price as it moved out of COVID low while RSI is showing a double bottom. Indications are that price will move upwards, it is in pursuit of a yearly low. The brent chart shows price bouncing on 200 week moving average support that forms a falling wedge with the resistance. If this move plays out Sasol bulls will be happy to accumulate at current level, the implication for inflation due to sharp rising oil will be something to watch.
* Risk accepting investors can buy based on reversal Hammer candle.
* Risk averse investors are best to wait for full confirmation that the cycle has turned when price closes above the blue trendline as well as the 10 week moving average (also blue).
* Risk accepting investors can buy based on reversal Hammer candle.
* Risk averse investors are best to wait for full confirmation that the cycle has turned when price closes above the blue trendline as well as the 10 week moving average (also blue).
Comment:
Sasol enters the timing band for a daily cycle low now sitting on the 0.618 extension, the hardest thing to do for investors is wait, Sasol demands that before pulling the trigger.
Comment:
Sasol has completed a weekly swing low, now seeking a close above the 10MA providing the green light for a long position to open for less risk accepting investors.
