FOSCHINI - Approaching next resistance.The stock has had a powerful rally this week, clocking up +16% so far.
Next major resistance to break will be the R112 level.
FHNGY trade ideas
Our opinion on the current state of TFGThe Foschini Group (TFG) is an international retailer of 28 fashion brands. It has 4,083 trading outlets in 32 countries around the world, with divisions in London and Australia, aside from its extensive presence in the South African market. One of the notable achievements of TFG is its successful business establishment in Australia, where many other retailers (like Woolworths) have failed. TFG bought the Retail Apparel Group (RAG) in Australia for just over $300 million in 2017. TFG has allowed the Australian management team virtual autonomy in managing the business and has not attempted to manage it from South Africa.
Over the long term, TFG has been a consistent performer in one of the most difficult industries in South Africa, with stiff competition from overseas brands and local clothing retailers. In its results for the year to 31st March 2024, the company reported revenue up 8.9% and headline earnings per share (HEPS) up 0.2%. The company said, "Cash retail turnover increased by 9.9% compared to the prior period and now contributes 82.3% to total Group retail turnover. Online retail turnover increased by 22.0% and now contributes 9.9% to total Group retail turnover. The Group maintained its gross margin percentage and increased gross profit by 8.6% to a record R27.0 billion in line with the growth in retail turnover."
We regard TFG as the best of the retail clothing companies, and it is well diversified overseas, which gives it a rand hedge element. Retail is normally very much impacted by the business cycle, but the TFG board has shown its ability to manage the business profitably in many difficult environments where others have failed. Following COVID-19, the share moved up steadily until October 2022, when it began to reflect the impact of rising interest rates and loadshedding on the South African consumer.
We believe that this remains a very well-managed company which should be accumulated on weakness.
FOSCHINI - Warning signsPrice action warned of slowing momentum and a change in the state of delivery from BUY to SELL.
The stock has pulled back into an area of interest. Failure at R94.50 likely will see it head to swing low.
buymeacoffee.com
TFG: building higherA price action above 10900 supports a bullish trend direction.
Further bullish confirmation for a break above 11200.
The target price is set at 11700.
The stop-loss price is set at 10400.
Remains above its 200-day simple moving average, supporting a bullish underlying trend.
The share appears to be in a mark-up phase out if the market cycle analysis. Such a scenario might support a bullish underlying trend.
$JSETFG - Foschini: Major Trend Change, EW Patterns EverywhereSee link below for previous analysis.
Foschini seems to have found a bottom at 8100.
The big bear market from 16688 has unfolded in a classic zig zag;
Wave (A) is a simple impulse.
Wave (B) is a running triangle.
Wave (C) is an ending diagonal.
The move from 8100 looks to be forming a leading diagonal.
After five waves are complete in the leading diagonal, I expect a three wave correction.
What is critical is for the correction not to breach 8100 which would invalidate the outlook.
Our opinion on the current state of TFGThe Foschini Group (TFG) is an international retailer of 28 fashion brands. It has 4083 trading outlets in 32 countries around the world. It has a division in London and one in Australia, aside from its extensive presence in the South African market. One of the notable achievements of TFG is that it has managed to establish a successful business in Australia where many other retailers (like Woolworths) have failed. TFG bought the Retail Apparel Group (RAG) in Australia for just over $300m in 2017. TFG has allowed the Australian management team virtual autonomy in the management of the business and has not attempted to manage it from South Africa. Over the long term, TFG has been a consistent performer in one of the most difficult industries in South Africa, with stiff competition from overseas brands and local clothing retailers. Consumer spending has also been under enormous pressure in South Africa. The company completed an over-subscribed rights issue to raise R3,95bn to reduce debt and pursue the company's growth strategy. The company has bought 382 JET stores from the Edcon liquidators for R480m which are now performing very well for TFG. TFG faces competition from the Chinese company, Shein, which only sells online, but has a very rapid response to changes in fashion. On 7th March 2022, the company announced that it had acquired 100% of Tapestry Home Brands for R2,35bn. Tapestry owns brands like Dial-A-Bed and Coricraft. In a voluntary update on the impact of loadshedding on 13th March 2023 the company said, "For the 2- month period (excluding the non-comparative Tapestry Home Brands ("Tapestry") retail turnover growth has decreased from 12,6% (excluding Tapestry)* for the nine months ended 31 December 2022, to low-single digit growth for these 2 months. This has in turn reduced retail turnover growth for the 48 weeks ended 25 February 2023 to 11,4% (excluding Tapestry)*". The company expects to lose R1bn as a result of loadshedding in the current financial period. In its results for the six months to 30th September 2023 the company reported revenue up 12,9% and headline earnings per share (HEPS) down 15,3%. The company said, "Group online retail turnover up 23,9% to R2,6 billion, contributing 9,8% to total Group retail turnover, the growth largely attributable to strong growth in South Africa". In an update on the 3 months to 31st December 2023 the company reported TFG Africa sales up 5% and same store sales up 0,7%. December month sales were up 12% and 6% on a like-for-like basis. Sales were affected by Transnet's logistics problems and a poor showing on Black Friday. We regard TFG as the best of the retail clothing companies and it is well diversified overseas which gives it a rand hedge element. Retail is normally very much impacted by the business cycle, but the TFG board has shown its ability to manage the business profitably in many difficult environments where others have failed. Following COVID-19, the share moved up steadily until October 2022 when it began to reflect the impact of rising interest rates and loadshedding on the South African consumer. We believe that this remains a very well-managed company which should be accumulated on weakness.
FOSCHINI - OversoldThe stock traded to a high of R119.13 in late November last year and has since broken down to an area of interest.
It will be important to see if bulls can hold the trendline that extends from May 2023.
No position as of yet, will see if any buyers step in.
TFG vs TRUAn extract from today's research notes. To receive these research insights, including trade ideas, get in touch today.
Monday 20-November-2023, 06h30 TFG vs TRU - Market Neutral/Pairs Trade View. Over the long term, the two pairs have been closely correlated, however over 3 years, the performance outcome has diverged. TRIU is higher by 96% while TFG has lagged, rising only 7.8%. Is there is an opportunity, on a relative basis, to buy TFG while simultaneously selling TRU?
Our opinion on the current state of TFGThe Foschini Group (TFG) is an international retailer of 28 fashion brands. It has 4083 trading outlets in 32 countries around the world. It has a division in London and one in Australia, aside from its extensive presence in the South African market. One of the notable achievements of TFG is that it has managed to establish a successful business in Australia where many other retailers (like Woolworths) have failed. TFG bought the Retail Apparel Group (RAG) in Australia for just over $300m in 2017. TFG has allowed the Australian management team virtual autonomy in the management of the business and has not attempted to manage it from South Africa. Over the long term, TFG has been a consistent performer in one of the most difficult industries in South Africa, with stiff competition from overseas brands and local clothing retailers. Consumer spending has also been under enormous pressure in South Africa. The company completed an over-subscribed rights issue to raise R3,95bn to reduce debt and pursue the company's growth strategy. The company has bought 382 JET stores from the Edcon liquidators for R480m which are now performing very well for TFG. TFG faces competition from the Chinese company, Shein, which only sells online, but has a very rapid response to changes in fashion. On 7th March 2022, the company announced that it had acquired 100% of Tapestry Home Brands for R2,35bn. Tapestry owns brands like Dial-A-Bed and Coricraft. In a voluntary update on the impact of loadshedding on 13th March 2023 the company said, "For the 2- month period (excluding the non-comparative Tapestry Home Brands ("Tapestry") retail turnover growth has decreased from 12,6% (excluding Tapestry)* for the nine months ended 31 December 2022, to low-single digit growth for these 2 months. This has in turn reduced retail turnover growth for the 48 weeks ended 25 February 2023 to 11,4% (excluding Tapestry)*". The company expects to lose R1bn as a result of loadshedding in the current financial period. In its results for the six months to 30th September 2023 the company reported revenue up 12,9% and headline earnings per share (HEPS) down 15,3%. The company said, "Group online retail turnover up 23,9% to R2,6 billion, contributing 9,8% to total Group retail turnover, the growth largely attributable to strong growth in South Africa". We regard TFG as the best of the retail clothing companies and it is well diversified overseas which gives it a rand hedge element. Retail is normally very much impacted by the business cycle, but the TFG board has shown its ability to manage the business profitably in many difficult environments where others have failed. Following COVID-19, the share moved up steadily until October 2022 when it began to reflect the impact of rising interest rates and loadshedding on the South African consumer. We believe that this remains a very well-managed company which should be accumulated on weakness.
TFG: lower lows?Declining Channel: The share has been trading within a well-defined declining channel, as highlighted by the two parallel red lines on the chart. This pattern typically suggests a consistent downward trend.
Moving Averages: Two moving averages are depicted on the chart - the "200-day" and "200-week." The share is currently trading below both these moving averages, further indicating a bearish sentiment.
Fibonacci Retracements: The share price has previously shown reactions near the 23.6% and 38.2% levels, indicating these could be areas of interest.
Target & Stop Levels: There's a bearish sentiment, with a target set at 8600 (a potential decline of 8.6% from current levels). On the contrary, the stop is placed at 10000, indicating a potential risk of 5.9% if the share moves against the anticipated direction.
Increase Exposure Level: The annotation "increase exposure around 9200" indicates a potential area where one might consider adding to a short position or potentially looking for a bounce.
Recent Price Action: It's worth noting that recent candles show strong red bars, suggesting a continued selling interest.
FOSCHINI - Relief RallyThe stock rallied hard yesterday after dipping and likely trapping some shorts just below the ambush zone R91.74
Price has pushed back over of the 20/50 ema but it will be important to see some follow through today else a a short-term reset to R93-95 may be in order.
"The 61.8% level is a Fibonacci retracement level that traders use as a trading strategy for the Forex market, futures, stock trading, and even options. The Fibonacci retracement ratios are derived from the Fibonacci sequence, which is a series of numbers where each number is the sum of the two preceding ones. The 61.8% level is found by taking one number and dividing it by the number beside it on the right. For example, 55 divided by 89 equals 0.6179 or 61.79%.
Traders use the 61.8% level in various ways to support their trading decisions. Here are some common applications:
Trading Strategy: Traders use the 61.8% level as a proxy measure for support and resistance. They look for price bounces from this level to identify potential buying opportunities.
Fibonacci Extensions: Traders use the 61.8% level as a potential target for price extensions in an uptrend. They look for price moves that exceed the previous high and then retrace back to the 61.8% level before continuing higher.
Stop Loss Placement: Traders use the 61.8% level as a potential stop loss placement in case their trade goes against them. They place their stop loss orders below this level to limit their losses.
It’s worth mentioning that traders often use multiple Fibonacci retracement levels in conjunction with other technical indicators to develop comprehensive trading strategies.
TFG: risky long?A price action above 9300 supports a bullish trend direction.
Further bullish confirmation for a break above 9750 (38.2% Fibonacci retracement level).
The target price is set at 10050 and then 10500.
The stop-loss price is set at 9300.
Corrected from oversold territory (see the lower panel).
Our opinion on the current state of TFGThe Foschini Group (TFG) is an international retailer of 28 fashion brands. It has 4083 trading outlets in 32 countries around the world. It has a division in London and one in Australia, aside from its extensive presence in the South African market. One of the notable achievements of TFG is that it has managed to establish a successful business in Australia where many other retailers (like Woolworths) have failed. TFG bought the Retail Apparel Group (RAG) in Australia for just over $300m in 2017. TFG has allowed the Australian management team virtual autonomy in the management of the business and has not attempted to manage it from South Africa. Over the long term, TFG has been a consistent performer in one of the most difficult industries in South Africa, with stiff competition from overseas brands and local clothing retailers. Consumer spending has also been under enormous pressure in South Africa. The company completed an over-subscribed rights issue to raise R3,95bn to reduce debt and pursue the company's growth strategy. The company has bought 382 JET stores from the Edcon liquidators for R480m which are now performing very well for TFG. TFG faces competition from the Chinese company, Shein, which only sells online, but has a very rapid response to changes in fashion. On 7th March 2022, the company announced that it had acquired 100% of Tapestry Home Brands for R2,35bn. Tapestry owns brands like Dial-A-Bed and Coricraft. In a voluntary update on the impact of loadshedding on 13th March 2023 the company said, "For the 2- month period (excluding the non-comparative Tapestry Home Brands ("Tapestry") retail turnover growth has decreased from 12,6% (excluding Tapestry)* for the nine months ended 31 December 2022, to low-single digit growth for these 2 months. This has in turn reduced retail turnover growth for the 48 weeks ended 25 February 2023 to 11,4% (excluding Tapestry)*". The company expects to lose R1bn as a result of loadshedding in the current financial period. In its results for the year to 31st March 2023 the company reported turnover up 19,4% and headline earnings per share down 4%. The company said, "We estimate the financial impact of load shedding to have reduced TFG Africa’s retail turnover by in excess of R1,5 billion in FY2023. As of 31 March 2023, 1 875 stores had back-up power, representing c.75% of TFG Africa’s retail turnover. Gross margin for the Group contracted to 47,9% (March 2022: 48,5%) mainly as a result of prevailing conditions in South Africa, which experienced heightened consumer pressure, unprecedented load shedding and consequently surplus inventories causing a higher level of promotional activity which negatively impacted gross margin". In a trading statement for the six months to 30th September 2023 the company estimated that HEPS would decrease by between 15% and 25% caused by, "The inflated post COVID-19 over performance by TFG London and TFG Australia in H1 FY2023, the increased levels of load shedding in South Africa and the impact of the higher interest rates and borrowing". We regard TFG as the best of the retail clothing companies and it is well diversified overseas which gives it a rand hedge element. Retail is normally very much impacted by the business cycle, but the TFG board has shown its ability to manage the business profitably in many difficult environments where others have failed. Following COVID-19, the share moved up steadily until October 2022 when it began to reflect the impact of rising interest rates and loadshedding on the South African consumer. We believe that this remains a very well-managed company which should be accumulated on weakness.
TFG - bullish biasThe Foschini Group, TFG
1. Price Formation: The price has broken out from a "W" price formation on a daily chart. The "W" pattern is considered a bullish reversal pattern, indicating a potential upward trend.
2. Moving Averages: The 7-day moving average (MA) is above the 21-day MA, which is a positive sign indicating short-term bullish momentum.
3. 200-day Moving Average: The 200-day MA is just hovering. This could suggest a potential shift in the overall trend, as the price approaches or hovers around this key long-term moving average.
4. Relative Strength Index (RSI): The RSI is greater than 50, indicating bullish momentum and potential further upward movement.
5. Price Target: R140
Overall, based on the described technical indicators, the outlook is bullish, with the price breaking out from a bullish "W" formation, short-term moving averages supporting the trend, and the RSI showing positive momentum.
The Foschini Group, TFG- the company
The Foschini Group is a South African multinational retailing group, offering a diversified portfolio of 28 leading fashion retail brands across various lifestyle and merchandise categories.
The company was founded in 1925 and has since grown significantly, both domestically and internationally. TFG has over 4,000 outlets in 32 countries, including South Africa, other African countries, the United Kingdom, and Australia. Their brands offer a comprehensive range of clothing, accessories, footwear, home décor items, jewellery, cosmetics, and sports apparel.
TFG has three main divisions: TFG Africa (which houses the majority of their brands), TFG London, and TFG Australia. Some of their well-known brands include Foschini, @home, Markham, Fabiani, G-Star Raw, Phase Eight, and Whistles.
The group has a strong e-commerce presence and has been expanding its digital transformation efforts, including digital marketing, data analytics, and online sales.
TFG - 1D - PREVIOUS HIGH BROKENFoschini has broken previous high and is making higher lows. Stop on this one will be large. Stochastic, MACD and Momentum have all crossed over, triggering the buy. Target about 10% profit.
TFG Quasimodo Inv head and shoulders upside to R120Inv H&S has formed on TFG. It's not a very attractive one as the left shoulder moved past the neckline.
I call these the Quasimodos of trading.
Anyway, the large downtrend has broken and the uptrend is on its way. So the signs of buying and demand are high.
We have other indicators confirming:
7>21
Price<200
RSI>50
Target 1 will be at R120.00
ABOUT THE COMPANY
Origins:
The Foschini Group (TFG) is a South African retail group with a diverse portfolio.
It was established in 1924, and its first store was a women's fashion retailer located in Cape Town.
Portfolio: TFG operates numerous brands across various retail sectors, including fashion, jewelry, accessories, cosmetics, cellphones, and homewares.
Some of its popular brands include
Foschini,
Markham,
Totalsports, and
Sterns.
International Presence:
TFG has a significant retail presence in 32 countries, including South Africa, the UK, and Australia.
Expansion:
TFG has grown through both organic expansion and strategic acquisitions. In recent years, the company has acquired numerous brands to diversify its portfolio, such as
Phase Eight,
Whistles, and
Hobbs in the UK.
TFGJSE:TFG is at an area of value, near a key MA and near a resistance level. Based on the MA, JSE:TFG can move past the resistance level, however, the stock is trading ex-dividend on the 19th. There we might see a R1.50 price drop.
The stock is interesting nonetheless.
TFG could take some time but heading to R120.00 interesting factInv H&S has formed on The Foschini Group.
It's potential and there are two scenarios.
One the price just rallies with the rest of the JSE Retailers and goes to R120.
Or two, it could hit the top of the downtrend, consolidate align and then break up and out of it once there are strong buying troops and demand.
Either way, the signs are good for upside since it broke out of its one year downtrend channel.
7>21
Price<200
RSI>50
Target R120.00
ABOUT TFG
~ The Foschini Group (TFG) is a prominent South African retail company with headquarters in Cape Town.
~ TFG was founded in 1925 and has since grown to become one of the largest retail groups in South Africa.
~ The company operates a diverse portfolio of retail brands, including Foschini, Markham, Totalsports, @home, Exact, and more.
~ Markham is a leading men's fashion brand known for its contemporary clothing, footwear, and grooming products.
~ Totalsports focuses on sports apparel, footwear, and equipment, catering to various sporting disciplines.
~ @home is a home and furniture brand offering stylish and modern homeware, furniture, and decor items.
~ TFG has a significant presence not only in South Africa but also in various African countries such as Botswana, Namibia, Lesotho, and Zambia.
HOW IT GOT ITS NAME
The Foschini Group (TFG) got its name from its founder, Benjamin Foschini.
He was a Jewish immigrant who established the company in 1925 as a small store in Cape Town, South Africa.
THE FOSCHINI GROUPmost retailers have been under pressure for a while this may be a possible bounce for TFG on this zone
TFG is a haven for trend traders and coming downMedium term downtrend has been evident over the last couple of months.
It's been a haven for trend traders.
These are the ones that go short and trail their stop losses as the market goes further down.
200>21>7
RSI<50
Target R68.45
$JSETFG - Foschini: Bottom STILL Not In Yet, What Now?The last coverage of Foschini was on the 14th of March 2023, link below.
Price has traded moderately lower since then.
On the 10th of May 2023, TFG released a trading update for Q4'2023 and the 12 months ended 31 March 2023.
Technically, not much has changed on the structure and we now have more clarity that the correction is not yet complete.
The stock had a bounce at 8228 but this level has recently been breached.
Though still very early days, the recent price action suggests that the stock is making another interconnecting (X) wave before we see further downside for wave (Z) to complete a complex triple-three corrective pattern.
The Group expects to release its annual financial results for the 12 months ended 31 March 2023 on Friday, 9 June 2023.
Until then, I will sit on my hands and observe price action.
TFG showing a ton of buying signals to R112.02 Bullish Scallop formed recently on TFG.
This coincides with a breakout to the upside from the continuous downtrend.
Now that we have had a break above both, shows momentum is setting itself for more upside.
Other indicators confirm upside to come.
7>21 MA
Price<200
RSI >50
Target R112.02
SMC
Bearish FVG formed (Arrow) this is where two candles prices do not overlap with the big ones... This means, we can expect the market to move up to rebalance and achieve equilibrium (Filling the gap).
Also below the Scallop formation is a Sell Side LIquidity Order Block. Smart Monet is sweeping the selling and buying into it, pushing the price up.
This is a good probability trade to go long.
TFG - Good level for a long?The Foschini Group seems to be in an area of decent support. It is testing the bottom of the range (yellow parallel band) and also the upwards blue TL. Any price around 82 seems like a good level for a long, with a stop loss on a close below 73.
