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UPDATE: Shoprite showing strong upside still to come target R257Since the last update, Shoprite shot above the neckline of the Inverse Head and Shoulders. Since then, it's been rocketing to our first target. As long as the JSE ALSI continues its medium term upside and the retailers continue to move up - there is no stopping this one. Other indicators confirm. 7>21 Price >200 RSI>50 Target remains at R257.00 ABOUT THE COMPANY Origins: Shoprite originated in 1979 in South Africa, starting as a chain of eight supermarkets in Cape Town. Growth: Shoprite is now the largest supermarket retailer on the African continent. They operate in 15 countries across Africa and the Indian Ocean Islands. Headquarters: The company's headquarters are in Brackenfell, Cape Town, South Africa. Brands: Shoprite Holdings operates several well-known retail brands, including Shoprite, Checkers, Checkers Hyper, Usave, OK Furniture, House & Home, and more. Services: Apart from retail services, Shoprite also provides financial services, such as money transfer, ticket booking, and payment of utility bills. Employment: Shoprite is a significant employer in Africa, providing jobs to tens of thousands of people.
JSE:SHPLong
by Timonrosso
UPDATE Shoprite short playing along nicely thanks to the rand Since the last trade update, SHP has been on a strong trajectory down. It formed a large Head and Shoulders on the daily chart which then the price broke below the neckline. We had other indicators confirming downside including: 200>21>7 - Bearish RSI<50 The target remains at R177.11 With fundamentals, I don't have much to say except the negative effect that the weakening rand could be putting pressure on Shoprite. There are a couple of reasons for the price to drop when the ZAR gets weaker including: Higher Import Costs A weakening rand means it's worth less compared to other currencies. If Shoprite imports goods from other countries, it would have to spend more rands to buy the same amount of goods. This increase in costs could decrease profits, which in turn could cause the share price to drop if investors expect lower future profits. Inflation Pressure: A falling rand can lead to inflation as the cost of imported goods rise. Even the Finance Ghost just spent R70 on a Sausage Roll in Cape Town! That's crazy! High inflation can erode consumers' purchasing power, potentially leading to a decrease in consumer spending. Shoprite, as a major retailer, could be adversely affected by this trend, leading to a drop in its revenues and, consequently, its share price. Economic Uncertainty: Currency depreciation often reflects broader economic instability or uncertainty. This can lead to decreased investor confidence not only in the rand but also in South African companies, including Shoprite. This lower confidence can result in selling pressure on Shoprite shares, leading to a fall in its share price.
JSE:SHPShort
by Timonrosso
Shoprite showing strong downside to come to R177.11Head and Shoulders has formed on Shoprite and the price has broken below the neckline. 200>21>7 - Bearish RSI<50 Target R177.11 CONCERNS: I don't like shorting strong companies generally especially when the JSE ALSI 40 is on a strong uptrend. Revenue growth is up 17.20% Net income Growth is up 14.70% Average annual Revenue growth (15yr) up 11.08% Net Margin is 3% but ROE is -24.97%. So it's unusual to see downside for this retail giant. But anyways, charts are charts and we have a plan in place.
JSE:SHPShort
by Timonrosso
Cup-and-handle pattern on ShopriteShoprite hasn't had the best year. In March it created a high of R281.90 and then proceeded to crash all the way to R174.50. Interestingly enough however, Shoprite has created a cup-and-handle pattern over the past two months. This is a common bullish pattern and indicates a change in trend. If you look at the chart above, you can see how Shoprite formed the "cup" part of the pattern during September and October. This was followed by a slight correction in November which created the "handle". There is also a clear bullish divergence on the MACD. For this reason I will be going long. Action: Place a Limit order to BUY at R205 with a Stop Loss set at R190. I will aim to take profit at R220 and R230 respectively. Margin: 10% Gearing: 10.00x Gain: +121.95% Risk: -73.17%
JSE:SHPLong
by UnknownUnicorn3689126
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