Transhex is a diamond mining company. Trans Hex Diamond Cutting Works is a black-empowered cutting and polishing factory of which they have a 75% interest in. According to their interim 2017 results the net asset value per share is R1-42. The group’s net loss amounted to R199m while for the same period in 2016 they reported a profit of R32,5 million.  On the 29th of March they made a cautionary announcement, warning shareholders that they are in negotiations that might have a material impact on the share price.

  • After some serious profit taking since the beginning of the year, the share has started to build on a consolidation base. This consolidation implies that shareholders are happy with the current affairs and if the negotiations go as planned the share price can easily rise.
  • The 26 & 9 day moving averages confirm that the momentum to the bottom is still clearly in place but it is evident that the 9 day moving average is curving to the upside and if the share continues to reach for higher levels, the 9 day would probably break through the 26 day which will signal a buy for the medium to long term investors.
  • Line A (R1-78) which has remained a resistance since April 2014 has also been tested.
  • For traders – Buy above line A but use R1-14 as stop loss to protect capital. The possible targets towards the top are R2, R2-31, R2-64 and R3-05.
  • For medium to long term investors – Wait for the 26 & 9 day moving averages to cross one another to the upside and start to accumulate then but below R1-11 the technical graph will warn again.

Let us know if there are any questions.

Kind regards

Frans & Christelle