TECHNICAL ANALYSIS: Resilient property stocks set for an uptick

Cape Town - Property stock Resilient has been badly beaten down this year so far, but is now forming a potential bullish reversal chart pattern, says technical analyst Colin Abrams.

If this pattern confirms the price will recover sharply, as shown below.

Resilient [JSE:RES] – Major reversal forming?

Recommendation: Buy a breakout

Current Trend: Short-term sideways. Med and long-term down, but oversold.

Strategy: Buy a closing price above line 1 (R70.00).

(Daily)

RES

Chart Setup: After enduring a ‘waterfall’ decline in recent months, Resilient is stabilising and forming a ‘potential’ inverse head and shoulders. It needs to close above line 1 to confirm it.

  • Its MACD oscillator (on top) is rising from an oversold level after giving a positive divergence, and has plenty of room to move up.

Strategy Details: Buy it on a close above line 1 (R70).

Target: Once (if) confirmed, the minimum target will be R100, based on the height of the inverse head and shoulders projected up.

Stop-loss: Place your stop as a close below R62. From R83 move stop up to a close below R68. And from R90 use a breaking of its prior two-day low as a trailing stop to protect profits.

  •  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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