GRT trade ideas
Will be monitoring a possible false break in GrowthpointLocal property, in general, has been struggling for the past 2 years, with good reasons. I just finished my report (will publish here soon) on the sector and although many of these reasons still persist, there are some reasons to slowly but surely put the sector on your personal "BUYING-RADAR". My personal preference still lies with the biggest counter in the sector.
Looking closer at Growthpoint (GRT), one can clearly see how the share price broke through one of it's strongest support levels (over a period of 6 years) recently. I do however feel that GRT found itself in the perfect storm and should be monitored closely.
Price currently in EXTREME OVERSOLD according to its 14-day RSI.
Very important stat to mention is the fact that for the first time since 2004, GRT's Historic Dividend Yield (10.6%) is trading above the South African Prime Rate (9.75%). Yes, I know with the tough economic environment locally, rentals could still remain under pressure for quite some time. So let's say we see a decrease of 20%. Even if this happens, which at this stage remain highly unlikely, we still have GRT trading close to 2.5% higher (yield) compared to money market.
If I was a short-term trader (which I'm not), I would use the 21-day Moving Average (EMA) at R21.13 as my confirmation and entry-point. Top of the diagonal resistance would be my first target (R22.00 - R22.20). Over longer-term I do believe GRT offer value.
JSE:GRT Growthpoint Markdown Gaining MomentumGrowthpoint has been undergoing distribution since 2013. After an upthrust after distribution (UTAD) and last point of supply (LPSY) the trading range has now been broken and the markdown is gaining momentum. (See posts below following the markdowns start)
Gap to fill on GRTJSE:GRT formed a gap between the 1st and 2nd of October that it looks like it might fill soon. Gaps are generally quite tempting to close for traders. The stochastic seems to be turning up, which is also a sign of a possible reversal. Keep an eye on this one for confirmation of a long position.
JSE:GRT Growthpoint Falling through the IceFollowing the larger distribution trading range (TR) of Growthpoint (See link below) in Wyckoff speak we are falling through the ice. This the markdown in Phase D taking place. We are now looking for a break of the trading range (TR), a backup (BU) and then the markdown to start in Phase E is expected to start.
GrowthPoint - Property still Safe as House?I know local property has been the “ugly stepsister in the family” for the past year or so, but Growthpoint is looking like a nibble. Since September last year (2018), the share price found support around the R23 levels. With the recent pullback in both the market and Rand, we’ve seen the share price back at the R23 levels and extremely oversold according to its 14-day RSI. It also lagged the struggling $JALSH performance as well.
I still believe that the group are well diversified enough, to weather the current storm and with a close to 23% of its net property income coming from Australia, are well diversified geographically. Locally, it has been tough, but with 6% of its net property income coming from V&A Waterfront, it’s a clear indication about the quality of their portfolio.
With a historic DY of 9.23% (income) and a consensus target price (according to Thomson Reuters) of R25.17, I do believe the company should be pricing in the full extent of the challenging environment.
With a clear descending triangle pattern on GRT’s share price, I would be very cautious about the R23 support level. Should the current support hold, I would watch both the 50-day & 200-day moving averages (at R24.30) as first point of resistance. Should that break, we could most probably see the share price test the top of the triangle (R24.50-R24.60), with a break and close above those levels being very positive for the GRT share price. This could see the share price being inline with consensus target prices as mentioned above.