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Telkom

Telkom Down channel to R15.00 nextDownward Channel has formed on Telkom. The price continues to make lower highs and lower lows. We can only go with the trend as long as it continues. So my bias is bearish as there are other momentum indicators confirming downside to come. 200>21>7 RSI<50 Target R15.00 ABOUT THE COMPANY Telkom SA SOC Ltd. is a leading telecommunications company in South Africa, offering a range of services to both individual and corporate clients. It was founded in October 1991 when South African telecommunications was deregulated. Telkom operates in more than 38 countries across the African continent, making it one of the largest telecommunications corporations on the continent. Telkom offers a broad range of services, including fixed-line telephone, mobile, broadband and fiber optic internet, digital television, and IT services. Telkom Mobile, formerly known as 8ta, was launched as Telkom's mobile service brand in 2010. The company has made significant investments in upgrading its network infrastructure to support advanced technologies like 4G and 5G. Telkom has played a key role in South Africa's broadband expansion efforts, including the rollout of fiber optic networks to homes and businesses. In 2017, Telkom introduced Telkom LIT, a digital entertainment platform offering video and music streaming services. It has partnered with other technology and telecommunications companies on various projects. For example, it announced a roaming agreement with Vodacom in 2018.
JSE:TKGShort
by Timonrosso
TKG - next stop either R38 or R50 JSE:TKG Don't you love the tension when a symbol gets to this point: - MACD is at the signal line, - RSI is at call it 50, - The price is on the 5EMA which is on the 15EMA which is more or less on the 200DMA, and - It's all at the tippety point of a symmetrical triangle In its longer term trend I would've leant toward the triangle resolving upward to R50, but in the current negative SA news cycle (civil unrest, looting etc) perhaps it resolves down to R38 instead? Seems 50/50 from here For what it's worth I'm long from R44.80 with extremely tight stops. Happy trading UC
JSE:TKGLong
by unclecool787
1
Telkom is getting killed - Here's why I'm leaving it aloneTelkom's CRASHED 54% since June! Here's why I'm leaving it alone… This is sad but you need to know. Today, I am taking yet another company off my trading watchlist. Telkom… Since June we've seen this telecommunications giant' share price crash from R100 down to R46.00 per share. That's a 54% sharp drop which signals MAJOR red flags when it comes to trading. In today's article, we'll go into four reasons why Telkom is getting killed, where it could go and why I'm leaving it alone… Reason #1: 50,000 subscribers are ditching Telkom’s fixed-line service a month! For the first time, the number of fixed lines in service have fallen from 3.5 million down to 2.3 million (23% down) compared to September 2018. And this trend is accelerating as around 299,000 subscribers have discontinued the service in the last six months alone. That’s over 50,000 subscribers that are ditching Telkom a month! What’s even more concerning is that there is a major decline in Telkom’s ADSL, VDSL and fibre customers, as new, smaller, lower-cost fibre companies have entered the market, we’ve seen a drop from 981,176 in March 2018 down to 847,650 in March 2019. This equates to losing over 21,000 customers every month. And you know what that means… A drop in revenue, trust and loyalty will lead to a further drop in the share price. Even Telkom warned its earnings per share is expected to drop by 30% to 40% compared to last year. Jean Pierre Verster, Protea Capital Management, mentioned Telkom’s free cash flow generation is negative and the decline in fixed-line revenue is severe. Reason #2: Telkom is losing the battle to acquire Cell C On 15 Nov 2019, Telkom advised its shareholders that it was in talks to potentially buy Cell C, which would create a business with about 22 million subscribers… However, the acquisition would require a financial restructuring as Cell C and its owners would try to restructure R8.7 billion ($591 million) of debt to ensure its gearing level is reduced to a sustainable level. All was said and done with regards to the due diligence, at the first stage, until the deal went off on a major detour when rival MTN Group came in. You see, the MTN Group had already signed an expanded roaming agreement with Cell C. In a statement on Tuesday, Cell C said the talks with both mobile companies are at an advanced stage. CEO of Cell C, Douglas Craigie Stevenson, said in a statement that the agreement with MTN will help Cell C manage its network capacity requirements in a more cost-effective manner. “The roaming agreement is transformative for Cell C.” This deal between MTN and Cell C is putting a dampener on Telkom’s proposed take over as analysts are now suggesting Telkom may have to pay a higher future price for the deal. And according to an email sent by Lester Davids, Johannesburg-based Unum Capital… “Telkom may not have the balance sheet capacity to take on the acquisition” This news of rivalry between the telecom companies continue to cause the Telkom’s share price to drop. In fact, since the statements were released, the investment community has lost trust as Telkom dropped over 11% in a week and then another 8% fall the following week. Reason #3: Both companies are heavily in debt! Telkom’s debt levels are worrying to stakeholders as things stand. Even though the Telkom’s mobile unit is growing, they are spending a huge amount of money and are taking on a lot of debt to fund it. In fact, its net debt has increased to R12 billion. Even Verster said, considering the saturation of the market, both mobile companies are not great businesses on their own. “When you put them together it is even worse,” “It is like having a concrete boot on the left foot, and then putting a concrete boot on the right foot as well.” Reason #4: Still major downside to come for the mobile giant Looking at the daily chart of Telkom, you can see the major crash that took place from R100 down to R46 in a matter of six months… With the sudden crash and with the ongoing problems, we could very easily see it drop to the next target at R30.00 per share and then even R15.00 per share. Then there’s the technicals! As if the reasons weren’t enough, there are technical reasons why I am taking Telkom off my watch list and leaving it alone. 1. High jumpiness When you see a share price drop 8% one week and 10% in another week, there is a high chance due to greed and fear that this will be ongoing until the market rectifies itself. But as a trader, I do not enjoy high volatility when it comes to trading, as very often you’ll find the trades will hit our stop losses or worse JUMP past our stop losses meaning you can lose more than you bargained on… 2. Potential warnings in the future With the extremely high debt, talks about acquisitions and with the investment community losing trust with the company, there is a higher chance of Cautionary Statements to be released on SENS (Stock Exchange News Service). I wouldn’t be surprised if the share is suspended or, dare I say liquidated, with what is going on with the company. For this reason, I’ll leave it alone and look for better more stable trading opportunities Trade Well, Timon Rossolimos Founder, MATI Trader
JSE:TKGShort
by Timonrosso
$JSETKG Capitulation volume? time to buy for a short term trade?I've been keeping a close eye on Telkom lately. Since topping out at R100 in June this year, it has more than halved in price during the last few months. What has caught my eye is the substantial increase in volume that we have seen at these lower levels. This almost gives me the feeling that market participants have started to capitulate which is normally a good indication that the worst is behind us and the stock should rebound. What also makes the current trading levels important is that this range between R45 to R47 as highlighted by the red horizontal support channel, was a significant area of support between the end of 2017 - 2018 from where the stock lowed before starting a massive rally all the way to R100. As can be seen by the RSI indicator, the stock is also extremely oversold and should some sort of mean reversion kick in, i think this presents an opportunity to buy at these lower levels between R45 to R48, for two separate profit targets at R54.50 and R60.50. The shorter term 20 day moving average (blue line) which has provided resistance for the stock on its way down is currently sitting all the way at R60.96 and declining by about R1 a day. Whilst it is always risky to try and catch a falling knife as they call it, i think the chart has some compelling reasons to support an entry point. Keep stops tight below R44 if taking this trade and hopefully with a bit of patience we should see some sort of mean reversion start to kick in on Telkom.
JSE:TKGLong
by MarcoOlevano
Telkom bear flagging on the daily? $JSETKGTelkom has had a decent correction from its recent highs close to R100.00. Price has been consolidating this down move in the form of a bear flag, which is usually a continuation pattern in the direction of the previous trend. Should the daily break below this flag pattern @ R88.00 we could see price fall further to R80.00. Also interesting to note is that the massive rally all the way from R50 saw the stock consistently trade above both its 20 and 50 day moving averages. Only with this most recent correction have we seen price fall below these moving averages and this is possibly starting to indicate a change in trend for the counter going forward
JSE:TKGShort
by MarcoOlevano
TKG - New Sell ZoneLooking at the TELKOM, we may derive the following from the weekly chart: 1. Price is at a notable resistance level where the first rejection has occurred. 2. Price may form a reversal pattern at the high going forward - will monitor this and short accordingly. 3. I am favouring a move to downside in the near future. 4. I am currently short at R100 and will hold sells, unless we get a clear high > R100. 5. As always - maintain your risk management. Let's see what happens. Note: The views provided herein do not constitute financial advice.
JSE:TKGShort
by zeerotrader
TELKOM (TKG) 4-HOUR TIMEFRAME LONGIt is shocking to see a stock soaring in an economy plagued with state capture scandals, corruption, uncertainty and all things junk. Notwithstanding the fact that i love South Africa, it is sadly true that most stocks on the JSE stock exchange are in bear market territory. Hence the shock i had when i opened this chart. I expect prices to move up as they continue the healthy uptrend. The exponential nature of this trend makes it difficult to ride it. It is like trying to jump onto a speeding bullet train. Anyway, i would consider the 8 200 level as a possible support area where buyers can enter into new positions. It is important to note that the price might possibly form a right shoulder to complete a tête et épaules (head and shoulders) pattern, causing the price to plummet towards the trendline. However, the long term bias is still long. I guess the bulls needed a break so to them!
JSE:TKGLong
by munyaelliott