$JSECLH City Lodge Hotels Ltd - Is A Bottom Finally In?CLH made an all time low in November 2020 and bottomed at R2,22 per share.
Amidst covid-19 uncertainties, travel restrictions and registering operational losses, the share price gradually made its way to a peak a year later at R6,50.
The advance, with overlapping 5 waves, is a textbook leading diagonal which is bullish base for further upside.
The leading diagonal is found in wave 1 of impulses and wave A of zigzag corrections, in this case, it is the former.
Since the R6,50 peak, the share price has been under pressure due to new variants of the covid-19 and continues operational losses.
The correction though has been relatively sideways and on low volume which shows the bears have been in a non-aggressive mood.
The correction itself is a textbook 3 wave (abc) and has held well above the R2,22 low.
Now, we are seeing a return to normal life, sports stadiums are full and there are little travel restrictions.
This is good for travel and leisure and this bodes well for CLH for growth off a low base.
Occupancy levels are already close to 2019 average levels.
In the short-term, a key level to watch is R3,85 and price action is already showing signs of a turnaround.
On the daily chart we have the following bullish indicators:
MACD above the zero-line and building momentum
Price trading above 50-day EMA
*City Lodge is expected to report its full year results in September.
