BOTTOM LINE: FSR corrected from the third phase of its bull trend in the form of a flag.
Having bounced on its second support trend-line, continued upside through 6,370cps would confirm a positive breakout of the pattern. However, with the 3W RSI in overbought territory, a near-term pullback is pending. If support holds above 5,760cps, another buying opportunity would be triggered through 6,370cps. The upside target would be at 7,725cps.
A reversal below 5,760cps would extend the correction to either the grey bold trend-line, or the 4,325cps support level. In this instance, go short below 5,760cps.
Technical Analyst, Sharenet
Moxima has a B.Comm Finance from the University of South Africa and is a certified Chartered Market Technician Level 2, currently completing Level 3. She has been a technical analyst for 10 years, working for BJM, Noah Financial Innovation and for Standard Bank as part of the Research Team in the Treasury Division of CIB. She now runs her own business, The Money Hub, and consults for Sharenet. Moxima has been rated as one of the top 5 technical analysts in South Africa and outperformed the market during the recent recession. She regularly makes an appearance as a guest on CNBC Africa and writes often for Finweek and Sharenet’s Views.