The JSE platinum index continues to make new recovery highs as platinum stocks continue to be amongst the leaders on the JSE.
This index has given a new upside breakout.
JSE PLATINUM INDEX – Higher targets still recommendation: HOLD/BUY IF NOT IN
Current Trend: Up on all main timeframes.
Chart Setup: The platinum index has just broken out above line 1 to confirm a short-term inverse head and shoulders continuation pattern (H/Sh), which is bullish. This is following on from a large inverse head and shoulders continuation earlier this year.
• Its Stochastic is entering its overbought zone, but can still continue higher for now given the new breakout.
Strategy Details: Buy platinum stocks if not in (or add to holdings).
Target: 49.20 is the target from the large inverse H/Sh, and slightly above it at 49.50 is the target from the smaller pattern. These are minimum targets. Ultimately expect it to get to a long-term resistance zone at lines 2 and 3 (54.30 to 58.50, respectively).
• Closest support is line 1 at 44.00.
Stop-loss: For short-term positions only, the stop is a close below 42.00. Take at least half short-term profits at 49.20, then raise stop on the remainder e.g. to a prior two-day low.
• Its medium-term stop is a close below 38.00.
- Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend trading courses, please go to www.themarket.co.za
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