After moving sideways for the past four months, Vodacom has now broken out to the upside and still has more upside to come as shown on its price chart.
Vodacom – Upside breakout
Current Trend: Short-term up. Med-term turning up.
Strategy: Buy at current levels.
Chart Setup: Vodacom has broken out above line 1 to confirm a large inverse head and shoulders pattern (labelled S-S-H-S-S). In the process, it has broken long-term resistance (line 2) which adds to the bullishness.
Strategy Details: Traders buy at current levels.
Target: Minimum target is R134.60, based on the height of the base projected up. Take partial profits there. Take the remaining profits at R136.40, its January highs.
Stop-loss: A closing price below R121.00 (which is just below line 1). From R131 raise the stop to your entry price (breakeven).
- 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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