The aim of this analysis is to determine a clear and defined entry point or buying price for the shares of SSW as the share price declined due to the impact the recent pandemic outbreak has on the global economy and which affects all the sectors and industries in the ecosystem. The upside is that it resulted in most shares losing more of their value which creates more opportunities for investors to buy and hopefully the value recovers over a period of time to enjoy capital appreciations. SSW in the mining sector is no exception to the above-mentioned event.
I have identified two possible good buying prices:
The first sound buying price will be 1353(R13.53) per share which is represented by the orange horizontal trendline. As indicated on the graph, the trendline once acted as the support from the beginning of 2017 until the end of the year with numerous price tests but it failed to break through, this shows the strong strength of the support. The price finally broke down the support just at the beginning of 2018 of which during the course of the year the previous support was tested twice as the resistance and the price managed to shoot through in 2019 and it became the support once again, so now is due to be tested again. At this point, I suggest one buys partially and then waits for a break-through or a bounce back to buy the rest of the desired shares (to be discussed below)
The second possible buying price will depend on what transpires at 1353 support. There are two possibilities that could take place, the first one is that should the price shoot through that will be a great opportunity to even buy at a cheaper price than the first purchase and the second possibility is that the price might fail to break-through so it will bounce back to test the ascending trendline as resistance which has been acting as the support from 20th July 2018 until 19th March 2020 when price managed to shoot through.
All of that being said any price between 1600 and 1400 is still a good buying price given the fact that the share price recently reached 4959 in mid-Feb this year(2020).
I have identified two possible good buying prices:
The first sound buying price will be 1353(R13.53) per share which is represented by the orange horizontal trendline. As indicated on the graph, the trendline once acted as the support from the beginning of 2017 until the end of the year with numerous price tests but it failed to break through, this shows the strong strength of the support. The price finally broke down the support just at the beginning of 2018 of which during the course of the year the previous support was tested twice as the resistance and the price managed to shoot through in 2019 and it became the support once again, so now is due to be tested again. At this point, I suggest one buys partially and then waits for a break-through or a bounce back to buy the rest of the desired shares (to be discussed below)
The second possible buying price will depend on what transpires at 1353 support. There are two possibilities that could take place, the first one is that should the price shoot through that will be a great opportunity to even buy at a cheaper price than the first purchase and the second possibility is that the price might fail to break-through so it will bounce back to test the ascending trendline as resistance which has been acting as the support from 20th July 2018 until 19th March 2020 when price managed to shoot through.
All of that being said any price between 1600 and 1400 is still a good buying price given the fact that the share price recently reached 4959 in mid-Feb this year(2020).