The telecommunications sector is fraught with pressures (lack of strong revenue growth, regulation, consumer, price cuts). Continual investment into it's networks also sees capex rising albeit cash flows are stable. VOD (115.96) has been under pressure since it's last trading update, declining from a peak of 136 to it's recent lows of 111. The recent price action has caught my attention and is leaning toward 'slightly positive'.
On Monday we saw a bullish engulfing candle being printed, following a strong move higher during the next session. Since Wednesday the candle structure suggests that 115.32 is a 'level of interest'. Traders should look for a break of the downward trend line which would line up with a break of the 5/10 exponential moving average. On the upside, the target would be 119.89 followed by 122.03 using a stop-loss of 113.10. Over the long term we still have a head and shoulder formation that has developed that could see R100 being tested.
VOD
On Monday we saw a bullish engulfing candle being printed, following a strong move higher during the next session. Since Wednesday the candle structure suggests that 115.32 is a 'level of interest'. Traders should look for a break of the downward trend line which would line up with a break of the 5/10 exponential moving average. On the upside, the target would be 119.89 followed by 122.03 using a stop-loss of 113.10. Over the long term we still have a head and shoulder formation that has developed that could see R100 being tested.
VOD