Trade of the Day

JSE Top 40 stock setting up nicely for a long trade

Looking at the daily chart of ABSA (JSE:ABG) I have noted that the share has broken and closed above the 50-day moving average. The counter has started making higher lows and higher highs indicating that the down trend may be over creating opportunity for a long reversal trade. 

Narrowing down to the lower 4 hour time frame I have identified R170 as a key level of resistance which was broken yesterday. I will now be looking for the share to retest this R170 level before taking a long position with an entry price of R170.

My profit target is around the next level of resistance at R188 and stops can be placed at R166 creating a trade with a risk to reward of 1 to 5.