The recent monster rally staged by the Rand certainly has put pressure on our rand hedge stocks and CFR did not get off lightly.
The weekly chart clearly shows the 9 weeks of pain since hitting highs near R130.00. The selling pressure has now seen the price test the bottom bollinger band at 2.1 standard deviations. Yesterday’s price action could signal a potential short term reversal and should we get a strong close today, I expect the price to revert back to the mid-point just above R120.00.
The local currency has started to come off the boil a little over the last couple of days and any further weakness should be supportive our long trade.
As far as my technical indicators are concerned, the weekly data shows a very over-sold price but already showing signs of new buying demand. Downward momentum has flattened out so we should see a bit of a relief rally from current levels.
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Here’s to profitable trading,
Unum Capital (Pty) Ltd