Anglo American Platinum: Setting Up For Bearish Revesal

At current levels, Anglo American Platinum appears vulnerable to a bearish reversal. Since 13-December we aw the R550 level act as a resistance in what appears to have been a key selling level. Over the past three trading sessions (11, 14 & 15 January), the price gave a false break on the upside while today we see a pullback below the R550 level. We also note the breakdown of a rising wedge technical formation while the Relative Strength Index (technical indicator) has refused to confirm the recent multi-year high. Relative to the share's 200-day moving average, the price trades approximately 30% above this level. As as common with a rising wedge formation, we often see a pullback before the "official" leg lower. Should we see the price trade near or above the R555 level again, traders could look to short/sell the share in anticipation a move lower. Over the medium term, the target is 470, using a stop-loss of R572.