Flash Note: Sappi Ltd, Long Term Sell?

-

Sappi - having a look at the monthly/long term chart. Some readers may recall I had a note in Feb 2017 warning on "Sappi's Share Slowdown". At the time SAP was trading at R84.75 since then has traded in a range of between R78 and R104. While the early to mid R70s appear to be a "comfortable long", this is what I see on the Monthly Chart: 
- Upward trend line going back to August 2013 has been breached. See the prior trend line breaks has provided great long term entry/exit signals.  
- Has formed a medium term triple top (May 2017, Dec 2017 and September 2018). 
- A key level is R85.25 - a level that, over the long term, the share has struggled to hold onto for extended periods of time. This goes back to 2001.
- RSI appears vulnerable on support going back to the March 2009 incline support. 
- Accumulation/Distribution Indicator is losing long term momentum, possibly reflecting buying fatigue and selling pressure.  

Bottom Line: Is Sappi a Long Term Sell?

Monthly Chart View:



Comments

Post a Comment

Popular posts from this blog

Flash Note: Firstrand Ltd - A Long Term Technical Sell

-
Image
Summary: At a PE Ratio of 14, Firstrand appears elevated. This is in relation to it's peers, in the context of a below average SA growth rate as well as the increasing market competition. Additionally, at current levels, the market may not be discounting the R20bn execution risk of UK-based Aldermore while technically, warning signs are starting to flash. At R66.77, this share is a Portfolio Sell .        I believe one has to consider  the valuation of SA Banks and whether they are indeed "value". Yes, we have the traditional metrics which is often cited such as the sector's "low" PE Ratios and very attractive, above average Dividend Yields. While these attributes are welcomed, the SA economic conditions have been relatively poor for years, so one would think that banks would trade at decade/multi-year lows. Not so. E.g. Although Absa is lower YTD, it trades near multi-year highs. Firstrand, with it's last close at R66.77, trades a mere 13.5% off i
Read more

2020 Trade Ideas Review: What Worked and What Didn't

-
Image
ALSO: Read about my Sappi Calls: https://re-rate.blogspot.com/2021/01/sappi-long-and-short-of-it.html Updated with last prices as at 24 December 2020.   The following is a review of the 2020 trade ideas that I have suggested. These were generated in my employment at two South African-based stockbroking firms as well as in the social media sphere where I occasionally share my technical perspective with market participants such as (private) proprietary traders, institutional traders and analysts and portfolio managers.     Trading Desk Analyst (Responsible for 80% of private client research. July 2016 to June 2020).  Investment Strategist (Headhunted to start and take full responsibility for the  private client  research. These include quarterly reports with the 'best ideas' for the period. July to December 2020).   The ones highlighted below stood out the most, on both the long and short side.   This is not a comprehensive view of either the best or the worst, but merely a sn
Read more

Testimonials: Feedback Received On Research and Ideas (Not Comprehensive)

-
"As we head into the festive season I’d like to send a shout out to our Investment Strategist Lester Davids who I brought onto the team nearly 6+ months ago. He was worked above and beyond to put out the highest quality of charting and analysis out there, we can all agree at some juncture we have seen one of his calls and traded it PA. Lester is contacted daily by Bloomberg and Reuters for comment and thus all our clients should feel rest assured we have one of the best Sales Teams in SA at present with our winning trade calls  locally and abroad hitting nearly 70% success rate. Well Done Lester." - Ex-Institutional Trader for a R130bn Boutique Asset Manager and a later a co-head of a CPT based Hedge Fund . (21 December 2021). Hi Lester, I trust you're doing well. I just wanted to commend you for all your analysis you keep putting out. You don't get enough recognition at all and it is just brilliant! Thanks for all the hard work - Sales Trader at IG SA ( 04
Read more