Trading Richemont
- Lester Davids
- Mar 27
- 4 min read
Trade Richemont with Unum Capital.
To get started, email lester@unum.co.za
Potential Gap Fill + Re-Test of Breakout Level
Into and at the recent highs, the price action model alerted traders to overbought conditions with the subsequent unwind and lower levels. The candle structure continues to reflect short term distribution. Note: An unfilled gap at R2927 has the potential to be filled with is in line with the 61.8% Fibonacci retracement range. Provisional next best actionable area: 21-WEEK EMA [R2934 - R3019]
Previous Post (07 March): Getting (or Staying) Rich With Richemont
On Wednesday 03 February we discussed Richemont, highlighting the price action model's unfavorable reward-to-risk on the buy/long side. Bear in mind, this has been a massive winner since our note on 26 November, alerting traders to monitor for a change of trend to go from neutral to bullish. To recap the 2 to 4 week reading ('do not enter a buy/long at current levels. the reward-to-risk is unattractive') while the 5 to 8 week reading stated ('aggressive buying is underway however the share is overbought on the lower time frame. expect a consolidation or a minor retracement').
At the recent peak (03 March), the price action model was prescient in identifying the overbought conditions and potential for a pullback. Over the last two sessions, the share has been under significant selling pressure. Well done to traders who may have capitalized on both the long and (then) short side.
Previous Post (Wednesday 05 February)
Trading Richemont: Model Reading Points To Unfavorable Reward-To-Risk
Previous Post: Relative To The JSE Top 40 Index, The Share Is Approaching Overbought
The chart below highlights the relative/ratio charts price distance versus it's medium term 75-day EMA.
Previous Post: Richemont: Sharp Bullish Reversal, In Line With Trading Comment & Model Reading
The comment below is an extract from our note on Richemont, dated 26 November 2024.
"While it the trend is down and the fundamental outlook is bearish, it may be worthwhile to keep an open mind for a potential change of trend following this multi-month consolidation" - Lester Davids, 26-Nov-2024.
The chart below highlights the share price development since:
You may also recall the end of day model reading (26-Nov) stating the following: "Attempting a rebound following a downward trend. The share may consolidate further before continuing, higher".
The share has since risen by 34%.
Previous Post: Tuesday 26 November 2024 (Time Published: 06h09)
The current price trend (down) reflects the automatic price action reading which clearly states the share is weak (ST & MT) while the 8-week and 21-week EMA may act as resistance ranges on any short term rally. The fundamental impact on price is known, with the impact of the Chinese slowdown having filtered through to almost all global luxury peers, resulting in muted growth prospects which has caused market participants to sell down the shares. The share was previous a short/sell idea on 07 June when it traded into extreme short term overbought territory at a high of R3194 before retreating by 27% to it's recent low of R2309. While it the trend is fundamental outlook is bearish and the price is trending down, it may be worthwhile to keep an open mind for a potential change of trend following this multi-month consolidation. What do we need to see? Strong price action with volume would be an early indicator that the market's sentiment toward the share is starting to change + clear/reclaiming the downward trend line in place since the recent peak of 07 June 2024. View as of Thursday 21 November at 10h52.
Previous Post: Richemont Is Retreating In Line With Model Reading - Wednesday, 18 September 2024
Real-Time: 10h45
Ticker: CFR
Currently lower by R415 or 15.4%
Potential target is the unfilled gap at ~R2380
Previous Post (22 August 2024)
• REAL-TIME: 15h30
ABOUT THE TACTICAL TRADING GUIDE:
Technology + Proprietary Insights has helped to develop automated tools and strategies that are used to identify potential trading opportunities as well as highlight potentially significant technical developments across various time frames. This page highlights readings from our Tactical Trading Guide (Price Action Tool) which is also available as a live tool via the telegram group. The tool provides automated price analysis for any tradeable instrument across 3 time frames: short (short term), medium (medium term) and long (long term). Readings are subject to change, based on the development of the subsequent price action.
The tool helps to determine and shed light on the some of the following:
Whether the reward-to-risk is attractive for a buy/long position?
Whether a share is weak or if aggressive buying is underway
Whether a trader can look to buy a pullback into a key moving average (continuation trade)
Whether a share needs to break a range for a new trend to be determined (bullish or bearish)
Whether a traders needs to monitor for a change of character that could lead to a bullish or bearish reversal
Whether a share could start a consolidation phase
Whether the upward momentum is slowing (if it's in a bullish phase)
Whether buyers can look to 'phase in' to a position (if it's in a bearish phase)
Whether a share lacks directional bias
Lester Davids
Analyst: Unum Capital
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