Kumba remains in its downtrend range - Which way to break?Kumba Iron Ore has been moving in this consolidation flag range since January 2023...
The price has indeed been making lower highs and lower lows.
But which way is it going to break, I believe depends on the Resources index.
As things look with the JSE ALSI, the downtrend is strong and more evident (despite this blip up).
But regardless we have different levels to watch.
For example, if the price breaks above R483.00, it'll give a great signal to go long and hold until it reaches a target of R600.00
If the price breaks down then the likelihood of a target with be R280...
This is a classic example of a Neutral trade with a strong trading plan of action.
Now we wait.
KIO
Kumba Iron Ore new Cup and Handle showing major upside to R686.3Cup and Handle has formed aver the last year.
Price broke above the brim level but then moved sideways. During the time it was making higher lows which is bullish by nature, but we haven't had the push we need.
Hence, the price is retesting the Brim which is forming a conservative entry for breakout traders.
7>21>200 - Bullish
RSI>50 - Bullish
Target R686.33
KIO - Short IdeaI'm not a big fan of going against the trend but this weekly candle plus the point of resistance just seems too good. A close on the daily below R550 triggers the short trade with a stop loss above a close of R580. Targets are R525 and R475. Worth noting that a weaker ZAR and stronger commodities price may turn this trade around so keeping an eye on those fundamental plays will be key for this trade to work out or fail.
JSEKIO - KUMBA Short setup- Price is at a major resistance level
- Bear flag has developed
- Closed wih an indecision candle (spinning top)
- For a less risky entry, wait for the close below the flag on the daily
- R:R is 1>2
- MANAGE YOUR RISK -
Disclaimer: All ideas are my opinion and should not be taken as financial advice.
JSE:KIO
$JSEKIO Kumba iron ore - has this rally gone too far too soon?Haven't called this stock too well this year, however after the magnificent rally we have seen of late, the stock may have gone too far too soon. Firstly if you look at purely the candlestick formation after today's trade, we are possibly witnessing the formation of an evening star reversal formation (tbc tomorrow). Secondly, we are starting to see volume evaporate on the move higher which is a possible clue that buyers are no longer interested in chasing price at such levels. Thirdly, we are starting to see some bearish divergence on the RSI (price has made higher high, not confirmed by a lower high in the RSI indicator). Watch for a possible reversal here. Price very very extended from major moving averages, so consolidation/correction very likely from here.. Would hope to see at least R400 on a shorter term pull back
KUMBA IRON SHORTKumba's horizontal resistance coincides very closely with the 200 day moving average. Having broken below this moving average, it signals a sell on the stock. We are currently seeing a bounce to re-test that level as well as resistance...I'll be looking to short R314.00 for a downside target of R270.00. Risking only 2% of my portfolio, the stop loss is placed at R327.00 which could signal a possible breakout