Tiger Brands, a top 40 listed company is one of the largest manufacturers and marketers of FMCG (fast-moving-consumer-goods) across the African continent. Some of their popular brands that you will recognize are Mrs Balls Chutney, Albany bread, Cross & Blackwell mayonnaise, Junglo Oats, Tastic rice, Black Cat peanut butter, Koo canned foods, Doom and All Gold products. Their latest financial results for the six months ending March 2018 reported a 4% decline in revenue. Operating income declined by 8% and headline earnings per share down by 16%.

  • The share is caught within a falling wedge between line A (R326-27) and line B (R303-80).
  • Above line A the formation can take the share to R363-65 should the full formation play out.
  • The 26 & 9 day moving averages confirm that the sentiment for medium to long term investors is still negative. Only when these two averages cross one another to the upside, can we assume that the sentiment might change to positive.
  • The MACD have started to show signs of optimism in the green.
  • There are two windows waiting higher between R409-39 and R421-16 and between R438-99 and R441-03.
  • Below line C (R315) we can assume that the share would retrace lower down into the wedge.
  • For traders – Buy above line A (R326-27) but use line C as stop loss to protect capital. The possible targets towards the top are R334-83, R340-21, R344-56, R348-90, R355-09 and R363-65. Or even higher to close the windows mentioned above.
  • For medium to long term investors – The momentum to the bottom is clearly in place and although the share is heavily oversold we don’t have confirmation of a turnaround candle yet. Technically we should wait for a turnaround candle first before we start to accumulate.

Let us know if there are any questions.

Frans & Christelle