Grindrod has unbundled their shipping business into a separate listing, with the main listing of the shipping business on the Nasdaq in the US and the secondary listing on the JSE. On the 19th of June the company made the following announcement: “Shareholders are advised that total earnings per share for the six months ending 30 June 2018 is expected to be positive (an increase of more than 100%). The prior year comparative period, being the six months that ended 30 June 2017, reflected a loss per share of 11.5 cents. The improvement is due to the foreign currency translation reserve release as a result of the spin- off of the Shipping business.”

  • The strong hammer candle (positive) from a low base on the share implies that the buyers bought in weakness during that session.
  • The share is caught within a descending channel (positive) between line A (R8-41) and line B (R7-47). The channel will be confirmed above line A which can take the share to R9-20 below line B the formation will be wiped off the table.
  • The fundamental window of the unbundling is still visible between R10-06 and R12-68. Technical analysts know that windows always close. However, it can take weeks, months or even years.
  • For traders – Buy above line A (R8-41) but use line B as stop loss to protect capital. The possible targets towards the top are R8-59, R8-71, R8-80, R8-90, R9-03 and R9-20.
  • For medium to long term investors – The share is heavily oversold which makes the probability of a bounce more likely however we would prefer a higher lows on the weekly graph first. But if you are keen to start to nibble yet do the same as the traders above.

Dont hesitate to ask if anything is unclear.

Frans & Christelle