This week the volume on many stocks have increased after significant declines. We identified Sasol potentially having a selling climax (See post below). Going down to the 1h time frame we see a trading range developing with a large operator buying at R30. However, equally, there is supply matching this demand. As a result, we see effort (high volume) without response (small spread) and the expected automatic rally (AR) has not materialised. It is time to be cautious and we will have to wait and see who wins. It depends on if the amount of capital the buyer is prepared to invest is enough to overcome the supply. While there is still such large supply we can expect the price to range in the trading range formed on the 1h time frame.
