South 32, a well-diversified mining and metals company is listed in South Africa, London and Australia. Their latest quarterly report reported a better cash position. The company also managed to buy back 176m of their own shares. Their Brazil Alumina sales decreased by 1% for the nine months ending March 2018. The SA coal production decreased by 6%, while export sales increased by 11%. The price earnings ratio of the share is 12 and the dividend yield of the share is 3.79%.

  • The share is heavily oversold which makes the probability of a bounce more likely.
  • The share is caught within a descending channel between line A (R35-70) and line B. The formation will only be confirmed when the share starts to consolidate above line A.
  • Below line B the formation will be wiped off the table and the target of the formation is R37-80 should the formation play out.
  • The 26 & 9 day moving averages confirm that the momentum to the bottom is still in place.
  • There are also two windows waiting between R35-23 and between R35-32 and between R37-21 and between R37-27.
  • For traders – Consider a buy above line C (R35-19) but use R33-88 as stop loss to protect capital. The possible targets to the top are R35-56, R35-89, R36-15, R36-42, R36-79 and R37-27.
  • For medium to long term investors – The share found some nice support at the 40 week moving average (R34-45) and a possible inverse head and shoulder is visible which will only be confirmed above R37-88.

Let us know if there are any questions.

Frans & Christelle