Telkom is one of the leading stocks on the JSE at the moment (and has been this entire year). Right now it’s giving a short-term pullback to set up another buying opportunity.
Telkom (TKG) – A buyable pullback
Current Trend: Up on all main timeframes.
Strategy: Buy from R90 or lower.
Chart Setup: Telkom has given a short-term breakdown from a symmetrical triangle (lines 2 and 3). This will lead to another good buying opportunity lower, closer to its 50-day moving average and line 1 support.
- Its Stochastic is not quite oversold yet, so the price can still drift down for a couple more days.
Strategy Details: Buy it at the R99.00 level or lower. (Line 1 support is at the R87.80 level).
Target: After this pullback look for a short-term rally to R103 to take trading profits. Over the medium-term (three to six months) it can go quite a lot higher than that, e.g. to R130.
Stop-loss: A close below line 1 support (R87.80). Once it closes above R99.00, tighten the stop a lot e.g. to a close below R98.80.
- 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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