Sasol has come under sustained pressure over the last three days, after news broke out that they experienced an explosion at their LCCP facilities. The market is concerned surrounding the potential for further delays to this project as a result of the damages caused.
From a technical point of view, the counter is now retesting the breakout of the triangular bottom reversal pattern, and should we see Sasol manage to hold and reverse off current levels of approximately R282, i believe we could have the potential for a good risk-reward trade here to buy the stock. What gives me confidence in the triangle bottom pattern is the fact that the break-out on the 17th December to the upside occurred on significantly increased volume. The current level we are trading at the time of writing this, is not only a retest of the triangular pattern, but it is also where we find both the 89/100 day moving averages as well as the 61.8% fib retracement of the most recent swing highs and lows.
Keep an eye on action around current levels, as any sign of a reversal could well be an opportunity to buy the stock with a tight stop and a potential for the counter to push back to recent highs of R330. (The triangle bottom pattern still has a much higher target in place of R370 should this play out in a textbook fashion).
From a technical point of view, the counter is now retesting the breakout of the triangular bottom reversal pattern, and should we see Sasol manage to hold and reverse off current levels of approximately R282, i believe we could have the potential for a good risk-reward trade here to buy the stock. What gives me confidence in the triangle bottom pattern is the fact that the break-out on the 17th December to the upside occurred on significantly increased volume. The current level we are trading at the time of writing this, is not only a retest of the triangular pattern, but it is also where we find both the 89/100 day moving averages as well as the 61.8% fib retracement of the most recent swing highs and lows.
Keep an eye on action around current levels, as any sign of a reversal could well be an opportunity to buy the stock with a tight stop and a potential for the counter to push back to recent highs of R330. (The triangle bottom pattern still has a much higher target in place of R370 should this play out in a textbook fashion).
"If you do what you love, you'll never work a day in your life" - Marc Anthony