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The rand platinum price ultimately dominates how local platinum stocks will fare, and it’s good news that the rand platinum price has now broken out of a large basing chart pattern. Expect ongoing upside in platinum stocks as a result.
RAND PLATINUM PRICE – Bullish breakout
Recommendation: BUY
Current Trend: Short and med-term up. Long-term sideways.
Strategy: Buy (Newplat) at current levels or better.
Chart Setup: The rand platinum price has finally given an upside breakout of a 16-month large rounding bottom (as circled). Note, the platinum stocks have been discounting this breakout for a while, but it’s still good news for platinum stocks.
(Daily chart)
Strategy Details: Buy the rand platinum price via Newplat, a locally listed ETF of the rand platinum price.
Target: Up to R14 100 on the rand platinum price as a minimum target, based on the rounding bottom. Ultimately up to line 2 at R16 490. On Newplat itself, this target is R141; and ultimately R162.50. (It’s currently trading around R121).
Stop-loss: A close below R113.35 on Newplat.
- Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend trading courses, please go to www.themarket.co.za
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