Nedbank is the fifth largest bank in South Africa according to market capitalization (R44bn). Their financial results for the period ending December 2019 reported the following: headline earnings down 7.3%, revenue up 2.5% and net asset value per share increased by 3.7%.

  • The stochastic indicator is oversold which makes the probability for a bounce to higher levels more likely.
  • The share is caught within falling wedge between line A (R91-09) and line B. The optimism of the formation will be confirmed above line A, which will then confirm a bullish flag formation, which can act as a continuation pattern for more upside.
  • The 3 & 8 day moving averages have broken one another to the upside which implies the short term sentiment towards the share has changed to positive.
  • Below line B, the optimism will be wiped off the table.
  • A window is waiting higher between R142-02 and R142-29, which can act as a possible target for higher levels.
  • For traders – Buy or consider a long above line A (R91-09) but use R75-80 as stop loss to protect capital. The possible targets towards the top are: R96-80, R100-30, R103-15, R106-01, R110-96 and R115-23.
  • For medium to long term investors – The 40 week moving average (R184-65) on the weekly graph is still a resistance which means the long term sentiment towards the share is still negative.

Frans & Christelle