JSE:KIO Kumba Being Distributed
Updated
The resources sector has been strong but Kumba has been a laggard in the sector. The Trading Range (TR) that was formed seems to have the characteristics of distribution with increased volatility. The volatility to the downside is seen by increased spreads, gaps and increase volume. Pullbacks have been on lower volume. After the recent pullback, Kumba is ready to be marked down out of the TR.
Note
How things can change. Kumba share price had been under pressure but things can change quickly. After the Vale tailings dam burst disaster in Brazil on the 25th of January, the Iron ore has shot up. The iron ore price was predicted to reach $55 per ton but has shot up after the event. This is the second big Vale dam burst but for other suppliers such as Kumba, it has given a boost. It will take some time for producers to fill the supply need and we can expect the iron ore price to remain high for some time.Note
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