Sanlam has a beautiful down channel which has another channel within the bigger channel. The share is seeking a yearly low price. The area it is approaching has a confluence of support where downtrend was halted before as shown by horizontal black lines. How to approach the trade:
1. Watch for price to make a swing low (on daily chart), watching to see reaction where inner channel support meets horizontal support (black lines)
2. Once swing low is confirmed, open a long position or use reaction off support to get in early
3. If risk averse open 50% position & buy the rest when price closes above the blue resistance on a weekly basis
4. If price continues down to COVID lows the 50% remaining can be deployed when price arrives there
5. We would want to hold until test of recent highs which is some 50% up move.
1. Watch for price to make a swing low (on daily chart), watching to see reaction where inner channel support meets horizontal support (black lines)
2. Once swing low is confirmed, open a long position or use reaction off support to get in early
3. If risk averse open 50% position & buy the rest when price closes above the blue resistance on a weekly basis
4. If price continues down to COVID lows the 50% remaining can be deployed when price arrives there
5. We would want to hold until test of recent highs which is some 50% up move.
Comment:
With AngloAmerican (AGL), a proxy for JSE Top 40 confirming a bearish cycle, one might want to take partial profit on SLM to deploy later in case it follows the market down.
Comment:
SLM appears to be angling towards making December 2022 the yearly cycle low, the ambiguity is on the daily cycle that is failed. We therefore await a weekly cycle low point to deploy that which had been sold in last week of February.
Trade closed: target reached:
The daily cycle shows trend exhaustion & an ambiguous cycle, booking all profits here would make sense.
