$JSEEMI Emira Property Fund giving us a shorting opportunity?
The JSE's property sector has unfortunately been under immense pressure over the last 2 years and the weakness exhibited by these property counters have provided many opportunities for the bears to capitalize on.
What I have identified on Emira Property fund is that the stock tends to trade in range bound rectangular consolidation pattern for a period of time before breaking down and starting a new leg lower. After consolidating between R13.00 and R14.50 between March and July this year, we finally saw the break below the R13.00 support which started the next leg lower in the counter. We have now formed a new trading range between R11.70 and R13.00 which i suspect could play out in a very similar fashion to previous consolidations.
In Addition, the 89 and 100 day moving averages (red/orange lines) have also capped gains for the stock on every attempt to rally since May and we have once again reached these moving averages as indicated by the red boxes. The RSI indicator has also moved into overbought territory with the current peak coinciding with the two previous short term peaks in the name.
With all the above in mind, i would favor my chances entering a short between R12.80 - R13.00 on EMI , using a stop loss as a convincing close above R13.00 (aggressive)/ R13.30 (passive) and looking to target the bottom of the range at R11.70 in order to take profits.
What I have identified on Emira Property fund is that the stock tends to trade in range bound rectangular consolidation pattern for a period of time before breaking down and starting a new leg lower. After consolidating between R13.00 and R14.50 between March and July this year, we finally saw the break below the R13.00 support which started the next leg lower in the counter. We have now formed a new trading range between R11.70 and R13.00 which i suspect could play out in a very similar fashion to previous consolidations.
In Addition, the 89 and 100 day moving averages (red/orange lines) have also capped gains for the stock on every attempt to rally since May and we have once again reached these moving averages as indicated by the red boxes. The RSI indicator has also moved into overbought territory with the current peak coinciding with the two previous short term peaks in the name.
With all the above in mind, i would favor my chances entering a short between R12.80 - R13.00 on EMI , using a stop loss as a convincing close above R13.00 (aggressive)/ R13.30 (passive) and looking to target the bottom of the range at R11.70 in order to take profits.
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