CHARTS POST 1

JSE WHL

WHL Weekly Chart

WHL like most of the JSE retailers has seen a significant sell off in the last few weeks. Looking at both the daily and weekly charts the share is showing to be highly oversold. Looking at the weekly stochastics it is apparent that the stochastics are grouped in the buy zone with a bullish intersection. The weekly share price has also now tested the long term support level and reached the 100% extension level. Looking at the final two weekly candle sticks a piercing line pattern can be identified with tails showing buyers coming in to hold the price up.The P/E is also histrionically relatively low at 15.13. As long as the share holds above  65.20 the chart is looking bullish

JSE NPN

JSE NPN Weekly chart

NPN is another share that has seen a significant pull back to its ultra long term trend line. The daily and weekly charts are very oversold with a weekly bullish intersection on the fast stochastic. Will look to go long and remain bullish above a weekly close of R1987. The last 2 candle sticks also depict a classic reversal formation . Targets are as seen in the graph.

JSE REI

JSE REI Weekly chart

Another share that is seriously oversold! Looking at the weekly chart the stochastics are heavily grouped in the buy zone and the RSI is showing a bullish cross with its moving average. The share price its self has also pulled back to the significant double support intersection level at R26.50. A close above the 200MA will confirm this bullish sentiment. Target 1 is to the 200MA level at R28.07 above this and target 2 is R29.15 and target 3 is R30.92

JSE NPN

JSE REI Weekly chart

Another share that is seriously oversold! Looking at the weekly chart the stochastics are heavily grouped in the buy zone and the RSI is showing a bullish cross with its moving average. The share price its self has also pulled back to the significant double support intersection level at R26.50. A close above the 200MA will confirm this bullish sentiment. Target 1 is to the 200MA level at R28.07 above this and target 2 is R29.15 and target 3 is R30.92

SILVER A COMMODITY TO WATCH 

When looking at sectors/shares/commodities that could be strong to the future one of my picks is silver. We all know that the world is becoming more conscious of promoting clean energy and moving away from fossil fuels. Bellow is an extract from a website discussing silvers use in solar energy. 

"What many don’t know is that silver is a primary ingredient in the photovoltaic cells that catch the sun’s rays and transform them into energy. 90 % of crystalline silicon photovoltaic cells (the most common cell) use silver paste and close to 70 million ounces of silver are projected for use by solar energy by 2016." - https://www.silverinstitute.org/site/silver-in-technology/silver-in-green/solar-energy/

Silver is currently trading well off its all time high of 50.00. Although the share has seen some significant movement in the last couple of days the large inverse head and shoulders full target has not been reached. The chart is in a hard state to reach for a very accurate buy level, but at around 19.14 I think it is looking good. First target there after is 21.89. For long term buyers that like silver 19.14 is looking like a good level.

JSE CFR

CFR Weekly Chart

One of the JSE top blue chips stocks CFR has not been performing well for a number of weeks now. Looking at the chart the next support level is looking to be 76.80. At this point the share will be extremely oversold and will be looking good for a buy. Both indicators are also in the buy zone.

JSE SBK

SBK Daily Chart

Target set has now been reached and the share is looking bullish once again.

JSE SBK Daily Chart

Share price failed to break out of the ascending channel with the resistance level holding. The share price now looks to be retracing back to the channel support. The target level is the channel support and 200MA level of R130.91. After the target level is reached the outlook is bullish with a large gap still open between R144.55 and R147.77. Looking at the P/E the share is trading at a relatively low value of 9.56 when compared to its historical P/E value.

Copper Chart

Copper Daily Chart.

The Copper price has seen movement to re-test the support and is forming a nice consolidation at this level. Looking at the bigger picture the Copper price seems to be in the process of forming a large bullish inverse head and shoulders pattern. Looking at the indicators they to are confirming this bullish sentiment with the stochastics in the buy zone and the RSI showing a bullish cross with its moving average. As long as the support holds the target levels show in the graph will remain.

JSE VOD

VOD Daily Chart

After seeing a significant pull pack VOD is now starting to look bullish. The share has pulled back to the support level and looks to have held. A close above the 200MA will be the confirmation of the trend change. Looking at the indicators they are showing that the share is very oversold. A hold above the support level will target the 2 levels shown in the graph.

JSE IMP

IMP Daily Chart

Full target has been reached. Looking at the chart now the share is looking to be potentially bullish with the candle sticks pulling back to the ascending support level and showing a consolidation. As long as this support level of 59.29 holds the bullish target of 70 will remain. It must be noted however that the stochastics are not yet grouped in the buy zone but the RSI is looking to be wanting to intersect with its moving average forming a bullish crossover.

   JSE IMP Daily Chart

   The share price just a few cents off the first target.

JSE IMP DAILY CHART

The plat shares have had an unbelievable rally in the last couple of days. However, IMP is now looking very overbought and looking due for a pull back. The share price is testing the resistance level shown with the last 2 candles resembling a classic reversal. When looking at the indicators they are supporting this with the stochastics heavily grouped in the sell zone as well as a very high RSI value with a bearish cross. The target level is shown in the graph.

JSE TOP40 Trajectory algorithm 30 day forecast

JSE TOP40 Trajectory algorithm 30 day forecast

Will start posting more of these more frequently. If you would like a brief description of how this is derived please see the forecasting tab. In short this is an objective mathematical analysis of the trend and seasonality in price of and index or share. The program uses this to analyse what these numbers and indicating to and using that to build a share price forecast. Will also upload a Top40 technical analysis.

Trajectory Forecasting algorithm

Background

This model was developed as a by product of a project that I was working on for a health care company specializing in hospital care. At the company I was investigating the optimal way to allocate nurses in hospitals to minimize cost to the company, as well as provide adequate care to the patients. During this process the idea for the trajectory algorithm was developed. 

Basics of how its works

The model makes use of mathematical formulas to identify trend and seasonally in number patterns. The algorithm is allowed to use 56 variables all affecting the output in different ways. The algorithm runs selecting the number of variables and the sizes of each dynamically over iterations to arrive at a final answer. 

What you need to know 

What must be stated is that this model is no guarantee nor is it claiming to predict the future. Its purpose it to provide an objective trajectory forecast based on past numerical data. 

The orange line is the actual index value movement for the last 250 trading days.

The blue line is the forecasted index value for the last 250 trading days. The point at which the orange line stops is where the forecast model starts its prediction for the next 30 trading days.

The green line is half a standard deviation of the index subtracted from the forecast data with a 6 day moving average. likewise the red line is the standard deviation of the index added to the forecast data with a 6 day moving average. 

Combined the top and bottom standard deviations are referred to as the "cloud" and once the 30 day forecast starts the standard deviations are referred to as the "forecasting cloud". This cloud is a confidence band that gives the user an absolute range in which price movement should occur. In periods of lower volatility the cloud will be narrower and in periods of high volatility the cloud will widen.

FTSE100 & JSE ALLSHARE index correlation 

This post looks at what the correlation is between moves on the FTSE100 and the JSE ALLSHARE to see if there is any links in how these indecies move.

 The first set of data that was looked at is seen above. 613 days of correlated trading on the FTSE100 and JSE ALLSHRE was used. The data was compared and two cases were assessed. These cases were: what is the correlation between the FTSE100 closing up and the JSE ALLSHARE also closing up, and what is the correlation between the FTSE100 closing down and the JSE ALLSHARE also closing down. 

The data was compiled and the results showed that on a day that the FTSE100 closed up, there was a 71.84% correlation that the JSE ALLSHARE also closed up. The same was done for the case of the FTSE100 closing down on a particular day and the JSE ALLSHARE also closing down which showed a 69.15% correlation.

The mean, standard deviation and correlation coefficient was also calculated for the days of correlated trading for the indices and the results can be seen above. The mean for the percentage movements for both indecies was very similar with the FTSE100 mean percentage movement coming to -0.01% and the JSE ALLSHARE coming to 0.03%. The Standard deviations were also similar with the FTSE100 equaling 0.98% and the JSE ALLSHARE equaling 0.99%.

The last set of analysis is the set up of a probability curve for analysing movements on the FTSE100 and the historical correlation of what would happen on the JSE ALLSHARE. The Y-axis is the confidence band this is the value that is added and subtracted to the percentage move on the FTSE100. The X-axis is the probability axis. 

How to use this curve is simple. The move on the FTSE100 is taken e.g. FTSE100 is up 0.5%. Then the user chooses the confidence band on the Y-axis (percentage deviation) for this example 0.8% is chosen. Then move across the Y-axis until you intersect with the curve and then move vertically down until you intersect with the X-axis and this is you probability. For this example the 0.8% confidence band chosen is subtracted from the 0.5%  move on the FTSE100 (= -0.3%) and the probability is attained using the curve. Moving across from 0.8 on the Y-axis the result is that there is a 71.6% probability that the JSE ALLSHARE closes above -0.3% based on the historical correlation between the FTSE100 and JSE ALLSHARE.