Trade Absa Group with Unum Capital.
To get started, email lester@unum.co.za
Absa: Gave traders 2x opportunities to enter a buy/long position, with the share trading in our re-entry buy range (see point #3 on the chart/image below).
This was a great opportunity for short term traders to generate cash.
Ultra short term traders could consider taking full or partial profits.
Well done to clients who may have capitalized on the opportunity.
Lester Davids
Analyst: Unum Capital
Sunday 09-Feb-2025
Previous Post: How To Trade: Absa Group (ABG) (Wednesday 22 January at 15h53)
Key Takeaways:
1. Fundamentals Remain Appealing
2. Currently Unwinding From An Overbought Range
3. The next-best probability re-accumulation range is between 17930c and 18150c. This range is subject to change as the price action and news flow develops.
In recent months, we have expressed our views around buy/long side opportunities in ABSA, with these short to medium term structures coming to fruition as the group reported results that were above analyst consensus expectations. The surge to above R195 placed the share in short term overbought territory, with the price action model confirming that the reward-to-risk for the short term traders had become unappealing. Below, the time-stamped model is shown:
What has transpired since? As noted, the share traded into the 19600c/19900c range and has since experienced a period of distribution (selling) to below 18700c. Note the short term deteriorating candle structure.
Where is the next best level to accumulate? Both the 50-day and 75-EMA continue to trend higher, with the price trading above these areas.
The share price is also trading above it's rising 21-week EMA.
There is an unfilled gap at 18203c, which is broadly in line with both the 75-day and 21week EMA. These are approximate areas meaning that the price can overshoot to the downside (or not reach it at all).
For now, my next-best probability re-accumulation range is between 17930c and 18150c. This range is subject to change as the price action and news flow develops.
Previous Post: ABSA GROUP Voluntary Trading Upside Accelerates Fundamental Re-Rating
Coming off a low base, materially stronger earnings growth is expected for 2024.
The share has materially outperformed it's peer group this week but remains muted over the long term. This gives the share room to advance over the medium.
To re-iterate, my long term target is R220.
Please scroll down for the previous posts.
Previous Post: ABSA GROUP: Absolute & Relative Re-Rating
Thursday 05 December 2024 (Time: 06:21)
In March, below R145, Clients were alerted to an opportunity to accumulate, driven by the model reading.
Yesterday, the share was the strongest performer amongst the financials.
On an absolute basis, the share is trading at multi-week highs.
On a relative basis, the share is looking to breach it's downward trend vs the JSE Top 40 Index.
To me, it looks the like the start of a re-rating and the potential start of relative outperformance. Remember, it's been very cheap with an appealing valuation.
The ratio chart is shown below:
Previous Post: Absa Group: Relative Value
Monday 25 November 2024 (Time Published: 06h28)
Fundamentally undervalued + has not participated in the re-rating of South African equities. Whilst it is trading off the Q2 lows, the share remains in a multi-year consolidation phase and off it's all-time highs. Long Term Target = R220. View as of Thursday 21 November at 09h59.
Previous Post: TRADER'S TOOLBOX: Absa's 3 Major Turning Points - Tuesday, 20 August 2024
The major turning points in the share were late March, mid June and early in August. These 2 longs and 1 short triggers helped traders position for the subsequent moves to take advantage of cash-flow generating opportunities.
BUY/LONG
Discussed in detail, along with the Tactical Trading Guide on Monday, 25 March.
The charts below are also adjusted to include dividends.
Short/Sell (Reading/Chart 1)
Warning that a buy/long was unappealing.
Short/Sell (Reading/Chart 2)
Alerting to a 1 to 2 day/week short/sell setup.
Buy/Long - Monitor For Bullish Reversal Opportunity
V-Shaped reversal followed by massive gap up during yesterday's session (earnings release).
Clients of Unum Capital are often alerted to key technical developments which include readings from the Tactical Trading Guide. This acts as a guide which helps to identify both opportunities and risk. To become a client, contact the Unum Capital Trading Desk: E-mail: tradingdesk@unum.co.za| Call: 011384 2923
Lester Davids
Analyst: Unum Capital
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