Trading Dis-Chem Pharmacies: Actionable Areas

Trade Dis-Chem Pharmacies with Unum Capital.

To get started, email lester@unum.co.za

We discussed DCP on 07 January as part of a note where the 200-day SMA was a focus. A bearish divergence was highlighted and we have since seen the share decline from 3720 to Friday's low of 3233, a decline of 13%.

Running the price action model, there are some early triggers that suggest the share is becoming attractive for a small buy/long position. We combine this with a manual view of actionable areas which can be found further down this page.

DCP Actionable Areas

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Previous Post (07 January): WORTH NOTING: 200-Day Developments (Tiger Brands, Outsurance, Mr. Price & More)

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I used Artificial Intelligence to provide an explanation on why the 200-day SMA is significant. Here's what it had to say:

The 200-day Simple Moving Average (SMA) is a widely used technical indicator in trading. It calculates the average closing price of an asset over the past 200 trading days, providing a smoothed representation of price movements. This smoothing effect helps traders identify longer-term trends amidst daily price fluctuations.

Key Developments and Implications:

Support and Resistance: When the price of an asset is above the 200-day SMA, it often acts as a support level. Conversely, when the price is below the 200-day SMA, it can act as resistance.

Trend Confirmation: A sustained move above the 200-day SMA can signal a bullish trend, while a sustained move below it can indicate a bearish trend.

Crossovers: Crossovers between the price and the 200-day SMA can generate trading signals. For example, a price crossing above the 200-day SMA might be interpreted as a bullish signal, while a cross below could be seen as bearish.

Time Frame: The 200-day SMA is a long-term indicator, typically used to analyze trends over several months or even years.

In Summary:

The 200-day SMA is a valuable tool for traders and investors to:

• Identify long-term trends

• Determine support and resistance levels

• Generate trading signals

• Assess the overall market sentiment

• By understanding the 200-day SMA and its implications, traders can make more informed decisions about their investment strategies.

Lester Davids

Analyst: Unum Capital