SASOL LIMITEDLong
$JSESOL - Sasol Ltd: Closing The Gap And Then Some.
Sasol released a trading statement for the six months ended 31 December 2022 yesterday.
The statement was indeed a mixed bag of expected results which the market did not take kindly to.
The share gapped lower at the open and bottomed at 27801 zac.
Whether the market over-reacted or not is not a debate I get involved in.
On the positive side, the expected results have been priced in now so lets take a look where I see short-term opportunity.
The 36,6% share price decline from 43860 zac to 25644 zac is characterized by a sequence of lower lows and lower highs.
The rally from 25644 to 32381 just managed to make a new high relative to the last significant lower high at 32296 though this does not give me conviction that the bearish sequence has been broken.
The rally from 25644 was preceded by a double-convergence which was an early indicator that a trend reversal was imminent.
The MACD is still strongly above the zero-line which is a positive sign that momentum is still to the upside in the short-term.
To add to the upside conviction, price bounced at the trendline which previously acted as resistance and is now providing support.
From an Elliott Wave perspective, the rally from 25644 to 23281 looks impulsive and is labelled wave((a)) of a minimum three wave correction.
In the short-term, I forecast that the gap will be closed and the share is likely to make a new high above 32381.
Aggressive traders can use 27801 as a stop-loss level but the outlook will only be invalidated by a break below 26544.
Sasol will release its 2023 interim financial results on Tuesday, 21 February 2023.
The statement was indeed a mixed bag of expected results which the market did not take kindly to.
The share gapped lower at the open and bottomed at 27801 zac.
Whether the market over-reacted or not is not a debate I get involved in.
On the positive side, the expected results have been priced in now so lets take a look where I see short-term opportunity.
The 36,6% share price decline from 43860 zac to 25644 zac is characterized by a sequence of lower lows and lower highs.
The rally from 25644 to 32381 just managed to make a new high relative to the last significant lower high at 32296 though this does not give me conviction that the bearish sequence has been broken.
The rally from 25644 was preceded by a double-convergence which was an early indicator that a trend reversal was imminent.
The MACD is still strongly above the zero-line which is a positive sign that momentum is still to the upside in the short-term.
To add to the upside conviction, price bounced at the trendline which previously acted as resistance and is now providing support.
From an Elliott Wave perspective, the rally from 25644 to 23281 looks impulsive and is labelled wave((a)) of a minimum three wave correction.
In the short-term, I forecast that the gap will be closed and the share is likely to make a new high above 32381.
Aggressive traders can use 27801 as a stop-loss level but the outlook will only be invalidated by a break below 26544.
Sasol will release its 2023 interim financial results on Tuesday, 21 February 2023.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.