Tsogo Sun - WHich way to break out? R1.94 or R27.69?The daily is very noisy.
Even the weekly is crazy.
So I had to really break it down and look at the monthly chart.
And what we can see is the noise being reduced to a RECTANGLE.
Now right now the price action is down. Despite the breakin uptrend. Despite the higher lows.
The current momentum is down. And all we can do is wait for a breakout.
Which way to Break?
Break down - R1.94
Break up - R27.69
I am going to remain neutral and this play is a MAJOR patience game that can take YEARS to play out.
I don't like what I'm seeing with the fundamentals:
High Level of Debt:
Tsogo Sun has been reported to have a high level of debt.
A substantial debt burden can be a concern for investors as it may affect the company's financial flexibility and profitability due to the interest and repayments required.
Unstable Dividend Track Record:
The company has had an unstable dividend track record, which may lead to concerns about the consistency of returns to shareholders.
Valuation Concerns:
Even though the stock has been trading below what is estimated as its fair value, investors may still have concerns about the future growth prospects and other intrinsic valuation metrics.
Performance Relative to Industry:
Tsogo Sun has underperformed the ZA Hospitality industry, which returned 5.1% over the past year, indicating that it may not be keeping pace with its industry peers.
