Risky Clothing Retailers
After President Ramaphosa announced on Thursday (23 April) that South Africa will be changing its lockdown status from level 5 to level 4, it was the clothing retailers that was hit the hardest. Main reason for this was because the initial draft for Level 4 lockdown did not permit the sale of any clothing yet. This saw most of the clothing retailers having a horrible day on Friday, with Truworths (TRU) being no exception (down 1.8% on the day). Subsequently, the Government however released a statement on Saturday (25 April), saying that the sale of Winter Clothing and Bedding, will now be allowed under Level 4. Although The Fochini Group (TFG) was hit the hardest (-7.1% on Friday), I believe from fundamental basis, TRU currently look a bit better. Read our full report on the company, which we released on Friday, here: http://oldoak.co.za/wp/index.php/2020/04/24/get-to-know-your-jse-companies-truworths-international-limited-jse-tru/
From a technical point of view, TRU is trading back at the levels it traded at post 2008 crash. It is also trading below all four its 8-, 21-, 50- and 200 week Moving Averages (EMA), which very much places TRU still in an extremely negative trend environment. The share price momentum is also still very much in the red.
I do however feel that the share price is now oversold and places the company firmly in value territory. Oversold are confirmed by both the 14-week RSI, which currently trade in EMTREME OVERSOLD territory and the FTSE/JSE All Share 1-year, relative indicator.
Based on valuations, I went long with my first nibble. At R21, I would buy my second and last tranche. Should we see a recovery this week, with a break and close above the 8-week EMA (R32.65), could see the share price test the bottom of the parallel channel at R34.50 next. A break and close above these levels could be incredibly positive, with next resistance point then being the 21-week EMA (at R39.80). My medium-term target on the company corresponds with our equity reports target of R45/share.
From a technical point of view, TRU is trading back at the levels it traded at post 2008 crash. It is also trading below all four its 8-, 21-, 50- and 200 week Moving Averages (EMA), which very much places TRU still in an extremely negative trend environment. The share price momentum is also still very much in the red.
I do however feel that the share price is now oversold and places the company firmly in value territory. Oversold are confirmed by both the 14-week RSI, which currently trade in EMTREME OVERSOLD territory and the FTSE/JSE All Share 1-year, relative indicator.
Based on valuations, I went long with my first nibble. At R21, I would buy my second and last tranche. Should we see a recovery this week, with a break and close above the 8-week EMA (R32.65), could see the share price test the bottom of the parallel channel at R34.50 next. A break and close above these levels could be incredibly positive, with next resistance point then being the 21-week EMA (at R39.80). My medium-term target on the company corresponds with our equity reports target of R45/share.
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Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.