We have been following Sasol sins the climax lows in 2020 indicating a target of R200 - see the progression of posts below. We have reached the target and now we are seeing active signs of distribution. After a climax in March, there was a strong secondary test but the next upthrust (UT) on volume made no progress (Effort without Response) indicating selling by the big players. A change in character was seen in June with an increased downward spread on volume making signs of weakness (SOW). The latest attempt to rally could not break the 50SMA and after a key reversal bar, it is time for Sasol to drop potentially retracing all the gains of the last year.
Your use of the two indicator sets is fantastic. I am closely watching the share. I note that your top indicator show the share losing steam very early on and the second indicator at the bottom gave confirmation of when to exit. Which indcator sets are these? Looks like RSI bollinger mixes?
SteynTrade
⋅
@RolandBotes, Hi The top indicator is a Traders Dynamic Index (TDI) based on volume. This is basically a volume RSI with Bollinger bands. The RSI is the thin blue line. The deviation between the two gives some idea about effort compared to the response. The Bolinger Bands are 2 standard deviations on a 34SMA. The bottom one is the Comparative Relative Strength (CRS) with the Top40 index with a 55 period SMA and 2xstd Bollinger bands. This gives a view if the stock is weaker or stronger than the market. When we are going down we are looking for stocks weaker than the market and the reverse when going up. However, both these indicators are just confirmational. The main observation is the volume price interaction according to the Wyckoff approach to the market.