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CANDLE OF THE DAY (1839) 09/11/2018 “Once in a lifetime you will find a hobby that will changes everything.”

Good Morning,

Market movers and shakers:

Name Movement Level % Name Movement Level Dow + 10 26 191 +0,1 Dax - 51 11 527 S&P - 7 2 806 -0,3 FTSE + 23 7 140 Nasdaq - 39 7 530 -0,5 Brent Oil + 1 70-76 Nikkei - 197 22 289 -0,8 Gold - 6 1 219 Hang Seng - 637 25 590 -2,4 Platinum - 9 860 Australia - 24 5 903 -0,4 USDZAR 14,15 Overall Index + 250 54 701 +0,5 EURZAR 16,05 Top 40 Index + 171 48 296 +0,4 GBPZAR 18,47

• Short term view – positive (Views of optimism, negativism or uncertainty act as guidance); • Medium term view – positive (Views of optimism, negativism or uncertainty act as guidance); • Long term view – negative (Views of optimism, negativism or uncertainty act as guidance); • The “medium term sentiment gauge” is 31 (Above 90 investors are greedy and expect too much of the market and below 10 they are too pessimistic);

Comments: The American markets ended mixed after the American Federal Reserve left rates unchanged. The Nasdaq, however is starting to show that sellers are once again around. The East is negative this morning despite the re assurance from Mr Xi to private companies that the state will not interfere with their business plans. The local market was also under pressure yesterday after Naspers started to attract sellers once again. Expect a weaker opening.

Graphs (opportunities) that caught our eye with the necessary buying or selling levels:

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Astral Foods (ARL) – daily graph

Astral Foods is a leading integrated poultry producer, supplying animal feed, broiler genetics, production and sale of chicks. Their latest trading update reported that Earnings per Share (EPS) for the 12 months ending 30 September 2018 is expected to be at least 80% up on the previous year and they expect their headline earnings per share to be 85% higher than the previous year. The consolidation that we wrote about on the 20th of September took the share even lower.

The share is building on a higher low, which will be confirmed above line A (R216-98).

The long descending channel will be confirmed above line B (R214-88) and the target of the channel is R260 should the formation play out.

The MACD is still positive.

The 26 & 9 day moving averages are on the point of breaking one another to the upside and if they do, it will confirm the optimism around the share price.

For traders – Buy or consider a long above line A (R216-98) but use R201-80 as stop loss to protect capital. The possible targets towards the bottom are: R227-25, R233-52, R238-59, R243-65, R250-87 and R260.

For medium to long term investors – The weekly graph still has some room for upside and the first sign of optimism will be visible above R216-90 but below R193-10 we can assume that the momentum to the bottom will continue again.

Clicks (CLS) – Daily graph Clicks Group is a retail-led healthcare group which has been listed on the JSE since 1996. The Body Shop, Claire’s and Musica are also included in the group structure. The group has more than 824 stores across South Africa. They have more than 500 in-store pharmacies. Their latest financial results for the

MACD

A

26 & 9 day moving average Descending channel

B Higher low

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period ending in February 2018 reported a 10% rise in group turnover and Cash generated by operations totalled R1.1 billion for the six months. The triple bottom that we wrote about on the 18th of October created a lamp pole formation but it seems as if the share is running out of steam.

A lamp pole formation has developed when the triple bottom (positive) played out but it seems as if the share is running out of steam.

First sign of weakness will be visible below line A (R193-78) and above R198 we can assume that the momentum to the top will continue again.

The 3 day moving average (green line) is also running out of steam and only when the 3 day breaks the 8 day to the downside can we assume that the sentiment for the short term changes to negative.

The stochastic is also heavily overbought and the negative divergence implies that the share price might follow the stochastic soon.

For traders – Sell or consider a short below line A (R193-78) but use R198 as stop loss to protect capital. The possible targets towards the bottom are: R190-29, R188-11, R186-58, R185-05, R183-16 and R180.

For medium to long term investors – We can only assume that the momentum to the top will continue when the share starts to change R200 into a support on a weekly close. First sign of weakness will be visible below R188-70 on a weekly close.

News Headlines: International:

Continental AG, profits have declined by 14.1%.

There is a strong demand for AstraZeneca’s new cancer drugs. Tate & Lyle, the food processor half year profits declined.

A

Stochastic

Lamp pole formation

3 & 8 day moving average

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China wants to more than triple nuclear power capacity by 2030.

Evonik wants to buy PeroxyChem for $625m. OneSavings Bank raised their growth forecast.

Local:

Vodacom and Telkom agrees to share network.

SA’s business confidence rises in October. Wescoal sees half year headline earnings per share to be between 20.9 and 24.9 cents. Standard Bank’s secondary listing will now be on the A2X exchange.

Tradehold reported their net asset value per share of R22-73.

Enjoy your day,

Frans & Christelle Sources: Bloomberg, Moneyweb, CNBC, Network24, Forbes, BDTV, Sake24, Netwerk24 and RSG

Performance tracker We have decided to keep track of the calls. Keep in mind the closing price will be the day before yesterday and it will always be the past 10 calls. The Risk:Reward column = Possible Profit/Possible Loss. This means for every R1 you risk, you can expect a possible profit of X in the column given. Mathematically we should write the risk:reward ratio as 1: amount in column but due to space constraints we only give answer to the equation. A good risk reward ratio is anything above 2. The higher the better. When it says not yet it means the trade hasn’t triggered yet.

Date Take Share Entry Stop loss Target Risk:Reward

Close 08/11

P/L per share

% P&L Status

2018/11/01 Long MND 352.88 335.20 370.00 0.97

336.53

(16.35) -5% Open

2018/11/01 Long SGL 10.62 10.11 12.82 4.31 8.78 Not yet

2018/11/02 Short ANG 140.00 146.60 129.50 1.59 140.43 -0.43 0% Open

2018/11/02 Long GFI 39.78 38.80 44.60 4.92 39.88

0.10 0% Open

2018/11/06 Long MTN 89.53 83.17 98.00 1.33 86.88

(2.65) -3% Open

2018/11/06 Long ZED 4.71 4.55 5.30 3.69 4.75

0.04 1% Open

2018/11/07 Long SOL 493.59 470.30 507.30 0.59 486.77

(6.82) -1% Open

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2018/11/07 Long FSR 69.91 64.64 81.00 2.10 69.52

(0.39) -1% Open

2018/11/08 Short JSE 163.55 167.10 156.80 1.90 166.31 Not yet

2018/11/08 Short REM 199.08 204.60 188.60 1.90

203.00 Not yet

This document contains technical analyses of objective information regarding markets and products. No part of this document should be

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