Trading Mr. Price: Capitalizing On Potentials Overreactions
- Lester Davids
- Mar 11
- 2 min read
Updated: Mar 19
Trade Mr. Price & JSE Shares with Unum Capital.
To get started, email lester@unum.co.za
(In addition to Mr. Price, I have also discussed Dis-Chem and TFG as shares that have pulled back to levels of interest - links as follows:
My disclosure, upfront: My preference is for horizontal trend lines over diagonal ones.
That being said, it's worth noting that the MRP, along with other South Africa-focused shares have retreated sharply since peaking in late Q3/early Q4 of 2024.
The pullback is understandable as the several constituents became excessively overbought on a medium term basis, and did not offer favourable reward-to-risk on the buy/long side.
The risks of loadshedding as well as the concerns around the economy (and budget) have contributed to the selling pressure in these shares.
In recent weeks, several constituents have entered high bearish momentum regimes, while also approaching oversold levels.
Naturally, these have been accompanied by early buy readings on the price action model (Tactical Trading Guide) which are used to alert and prepare traders for opportunity.
MRP is approaching the September swing low as well as the rising trend. Now, I am not saying that the incline support will hold. In fact there is a strong possibility for an overshoot on the downside however, a further push in oversold could create a real-time opportunity for the 'fast-fingered' trader. This extra selling pressure could occur on any negative news and overreaction to tomorrow's (12 March) budget.
Provisionally, R218 to R222 is a first 'level of interest' to accumulate for a rebound back to R236 to R240.
Stay flexible as these levels are subject to change in a real-time environment.
Previous Post: Mr. Price's Model Reading Points To Unfavorable Reward-To-Risk
Thursday 12 December 2024 (Time: Pre-Market)
MRP Mr. Price Group
Last week's price action/model readings warned against fresh longs at/around current levels.
Additional notes on the slide below
Lester Davids
Analyst: Unum Capital
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