The following comment was included as part of today's research. For more research insights, including trade ideas, get in touch today.
JSE Diversified Miners vs JSE Top 40 Index. The price action could improve before the news gets better. Last week we saw some resource shares stabilize (AGL and PGMs) which is in the midst of the ongoing Chinese economic weakness. My underweight view of sector vs the broader market (22 November 2022) has gone well beyond expectations with the sector subsequently being a serial underperformer (-19% over the period). I will acknowledge that I can't pick the bottom however we can rely on a combination of factors that help us assess when the reward-to-risk is appealing. Going through the 'Distance' charts, I've noticed the ratio (Miners vs Top 40) has developed a lower low while the distance vs the 200-day SMA is relatively 'flat' (a positive divergence). Most names acted well today. It looks like that 475-ish level on AGL has held again. If you go back, that was previously a major support zone.
Attached to this post is the chart I published in November highlighting the potentially bearish underperformance of JSE Miners vs JSE Top 40.
JSE Diversified Miners vs JSE Top 40 Index. The price action could improve before the news gets better. Last week we saw some resource shares stabilize (AGL and PGMs) which is in the midst of the ongoing Chinese economic weakness. My underweight view of sector vs the broader market (22 November 2022) has gone well beyond expectations with the sector subsequently being a serial underperformer (-19% over the period). I will acknowledge that I can't pick the bottom however we can rely on a combination of factors that help us assess when the reward-to-risk is appealing. Going through the 'Distance' charts, I've noticed the ratio (Miners vs Top 40) has developed a lower low while the distance vs the 200-day SMA is relatively 'flat' (a positive divergence). Most names acted well today. It looks like that 475-ish level on AGL has held again. If you go back, that was previously a major support zone.
Attached to this post is the chart I published in November highlighting the potentially bearish underperformance of JSE Miners vs JSE Top 40.
