KIO - My Best Idea This Past WeekI don't care if you accuse me of 'highlighting a trade that worked' as I've always showcased my shortcomings or trades that have not worked out planned.
I'll say it myself: I've had my eye on the ball, staying disciplined as always to find the opportunities that offer the best reward-to-risk . This has resulted in me being fortunate to see several names go my way in the last few weeks by having communicated the correct positioning for my employer's clients.
Of the lot, KIO was a standout. Below, I've inserted the original chart as included in last week Monday's research notes. The price at the time was R405. It traded as high as R484 this week.
I also managed to identify the long side on AGL (last Thursday 07 September) at R484. It traded as high as R549 as well as TGA at R134 recently - it traded at 16999c on Friday.
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KIO trade ideas
Kumba remains in its downtrend range - Which way to break?Kumba Iron Ore has been moving in this consolidation flag range since January 2023...
The price has indeed been making lower highs and lower lows.
But which way is it going to break, I believe depends on the Resources index.
As things look with the JSE ALSI, the downtrend is strong and more evident (despite this blip up).
But regardless we have different levels to watch.
For example, if the price breaks above R483.00, it'll give a great signal to go long and hold until it reaches a target of R600.00
If the price breaks down then the likelihood of a target with be R280...
This is a classic example of a Neutral trade with a strong trading plan of action.
Now we wait.
KIO Within Timing Band for a Medium Term LowThe price for KIO hit a target of 2 intersecting trendlines providing a springboard for price to move upwards. Will be looking to go long observing the following factors:
1. Price closing above the blue trendline
2. A short-term back-test is a good entry for more risk acceptance
3. Profit target of at least 30%
$JSEKIO - Kumba Iron Ore: Speculative Buy Outlook InvalidatedThe recent speculative buy outlook on Kumba has been short lived, link below.
Price has broken below 40800 and now 33991 becomes the next level of interest.
The three wave move from 80338 to 33991 is a large zigzag and can be all of the correction but it can also be wave (W) of a combination corrective pattern.
I will sit on my hands on Kumba and watch price as it approaches 33991.
$JSEKIO - Kumba Iron Ore: Speculative Buy Above 40800The bigger picture structure for Kumba is quite complex so I will be looking at price action only from the 20 March 2023 low of 40800.
A recognizable price pattern is the three wave expanded flat for wave ((ii)).
If 40800 holds, wave ((iii)) can take price beyond 56000 giving a good risk:reward trade.
My conviction is not that high but trading is all about taking and managing risk.
KIO - Previous Sell at R605Kumba Iron Ore (KIO, 46032c) | WEEKLY CHART | Two patterns to note: (1) A multi-year megaphone formation and (2) a potential bear flag structure. We COULD attempt to rally in the short term however a breach of the incline support may trigger a continuation to the downside opening up a medium term continuation short/sell opportunity. Last Idea: Short at R605 (07 June 2022)
KIO: building on higher lows?A price action above 44100 supports a bullish trend direction.
Crossed just above its 200-day simple moving average.
Confirmation for further upside potential for a break above 45800.
The first target price is set at 47200.
The second target price is set at 49900.
The stop-loss is at 43600 and will negate the bullish bias.
Remains a risky trade.
KIO: some further upside potential?A price action above 48000 supports a bullish trend direction.
Increase long exposure for a break above 51300.
Upside price potential at 54300.
Downside price potential at 46300. Negate the bullish stance for a break below this level.
Remains above its 200-day simple moving average.
The price action might attempt leg 3 of the megaphone pattern.
KUMBA- Lower highsAs shown on the daily chart, KIO has steadily been making lower highs from the boom period of 2021. This chart does not bode well for the price with their earnings due on 21 Feb. Momentum indicators are looking lackluster to say the least and from a fundamental point of view, I think supply chain issues and Eskom has hampered production and delivery. I have a sneaky suspicion that earnings are going to disappoint. I expect a gradual fade well into April and would not be surprised if the stock went all the way down to test that support level of around R350.00. looks like a good short to me...
Kumba Iron Ore new Cup and Handle showing major upside to R686.3Cup and Handle has formed aver the last year.
Price broke above the brim level but then moved sideways. During the time it was making higher lows which is bullish by nature, but we haven't had the push we need.
Hence, the price is retesting the Brim which is forming a conservative entry for breakout traders.
7>21>200 - Bullish
RSI>50 - Bullish
Target R686.33