Keep a close eye on Kumba Iron ore around current levels. Two important inflection points are of interest to me:
(1) The stock has been quite sticky around the 200 day moving average (green line) in the recent past. The 200 day moving average often becomes support and resistance for the stock. (as indicated by the green blocks) Currently the stock seems to be consolidating around the 200 day moving average and i would expect a top to form around these levels.
(2) Most importantly, the declining trend-line joining the tops since July 2019 comes in at these levels. Stock is currently resisting off this trend-line.
In addition, volume has tapered off on the rise which doesn't instill to much confidence in the move higher. The Relative Strength Indicator has not managed to break above the RSI 63 level since October 2019 and is also currently resisting once again.
Putting all of the above together, I would favor Kumba Iron Ore retreating from current levels. Look to short between R370-R380, using a stop loss as a close above R390. Target on the downside: R305.
(1) The stock has been quite sticky around the 200 day moving average (green line) in the recent past. The 200 day moving average often becomes support and resistance for the stock. (as indicated by the green blocks) Currently the stock seems to be consolidating around the 200 day moving average and i would expect a top to form around these levels.
(2) Most importantly, the declining trend-line joining the tops since July 2019 comes in at these levels. Stock is currently resisting off this trend-line.
In addition, volume has tapered off on the rise which doesn't instill to much confidence in the move higher. The Relative Strength Indicator has not managed to break above the RSI 63 level since October 2019 and is also currently resisting once again.
Putting all of the above together, I would favor Kumba Iron Ore retreating from current levels. Look to short between R370-R380, using a stop loss as a close above R390. Target on the downside: R305.
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