Anglo making an unexpected short and downside to come to R337.00
Updated
Inv C&H has formed on Anglo Gold.
21=7 And seems to be crossing down.
Price>200 - This is Bullish but with the price so far away from the MA means, there would be a sling reaction to take the price back down.
RSI<50 - Bearish biased.
Target is at R337.00 for shorters.
THOUGHTS:
This was completely unexpecting as the JSE ALSI seems to be heading up.
The rand has been weakening with a touch of strength in the last week. This could be one of the linchpins to Anglo Gold's potential fall due to the following:
Revenue in Dollars - It's a U.S World!:
Anglo Gold, primarily earns its revenue in U.S. dollars because gold is priced and sold globally in dollars. So when the rand strengthens, the revenue drops.
Impact of a Strong Rand drops gold sales ouch!:
When the rand strengthens against the dollar, it means the same dollar revenue from gold sales converts into fewer rands.
Reduced Profitability - Stronger rands - less rev:
This currency fluctuation can reduce the company's profitability. As their revenue decreases in rand terms while their costs remain the same or may even increase.
Investor Attraction or should we say detraction! :
A decrease in profitability can make AngloGold less attractive to investors, affecting demand for their shares.
Share Price Drop: If investors find the company less attractive, they may sell their shares or choose not to invest, which can lead to a decrease in the share price.
Next analysis I will do is Gold to see what's going on. But yes, I'm definitely short biased.
21=7 And seems to be crossing down.
Price>200 - This is Bullish but with the price so far away from the MA means, there would be a sling reaction to take the price back down.
RSI<50 - Bearish biased.
Target is at R337.00 for shorters.
THOUGHTS:
This was completely unexpecting as the JSE ALSI seems to be heading up.
The rand has been weakening with a touch of strength in the last week. This could be one of the linchpins to Anglo Gold's potential fall due to the following:
Revenue in Dollars - It's a U.S World!:
Anglo Gold, primarily earns its revenue in U.S. dollars because gold is priced and sold globally in dollars. So when the rand strengthens, the revenue drops.
Impact of a Strong Rand drops gold sales ouch!:
When the rand strengthens against the dollar, it means the same dollar revenue from gold sales converts into fewer rands.
Reduced Profitability - Stronger rands - less rev:
This currency fluctuation can reduce the company's profitability. As their revenue decreases in rand terms while their costs remain the same or may even increase.
Investor Attraction or should we say detraction! :
A decrease in profitability can make AngloGold less attractive to investors, affecting demand for their shares.
Share Price Drop: If investors find the company less attractive, they may sell their shares or choose not to invest, which can lead to a decrease in the share price.
Next analysis I will do is Gold to see what's going on. But yes, I'm definitely short biased.
Note
Still more downside to come with the gold stock. It's following with the crash of commodities.
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Trade Well,
Timon Rossolimos
Founder, MATI Trader
(Pro trader since 2003)
facebook.com/groups/matitrader
🌐Website:
timonandmati.com
𝕏 (Formerly Twitter):
twitter.com/timonr
Trade Well,
Timon Rossolimos
Founder, MATI Trader
(Pro trader since 2003)
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