Discovery is a financial services group company. They are known as the company who makes people healthier as they reward a healthy lifestyle so that individuals can benefit from their medical aid, investments, insurance and retirement portfolio’s. Their interim results for the 6 months ending December 2017 reported a 19% rise in profit from operations for the group. Discovery health reported a 12% rise in operating profit and Discovery card business revenue increased by 7%.

  • The target of the falling wedge was reached but now a dangerous megaphone formation was confirmed.
  • The megaphone formation was confirmed below line A (R161-87), which is also where the 26 day moving average was waiting.
  • We know that a megaphone formation, can change into a jaws of death, which can take the share even lower than the target of the formation of R152.
  • The 9 day moving average (green line) seems to be running out of steam and a cross of the 9 day through the 26 day moving average will act as confirmation of the pessimism.
  • The MACD has already turned negative.
  • For traders – Consider a short below R161-23 but use R169-47 as stop loss to protect capital. The possible targets towards the bottom are R159-65, R158-02, R156-89, R155-75, R154-34 and R152.
  • For medium to long term investors – The share is flirting with its 40 week moving average (R167-19) and we will remain confident in the share as long as this moving average remains a support but below this moving average the share will warn again.

Frans & Christelle