The Satrix RESI ETF provides investors with effective exposure to the performance of the FTSE/JSE Resources 10 Index. This index is comprised of various companies operating in the mining, oil and gas, and other natural resources space within South Africa.
The ETF consist of 10 different companies, with the top five being Anglo American (~30%), Gold Fields (~16%), AngloGold Ashanti (~11%), Sasol (~9%) and BHP (~7%).
Technically, the ETF is trading near a major support level (see the black trendline on the first chart). Buying pressure at this level is strong and this may prevent further downwards movement in the price.
The ETF is also in an accumulation phase - a period in which knowledgeable investors start purchasing large quantities of shares at discounted prices (due to them being perceived as undervalued within the market). This phase usually precedes a period of price appreciation.
Both the major support and the accumulation phase of the ETF are indicative of strong underlying demand, which is expected to drive the price higher going forward.
The ETF is trading below its 200-day simple moving average (SMA) of ~R70.50 and we take a counter-trend strategy in anticipation of a price correction near term.
Fading downside momentum, according to the MACD indicator and upwards movement of the On-Balance Volume indicator, supports our bullish stance.
Share Information
| Share code | STXRES |
|---|---|
| Industry | ETFs |
| Market Capital (ZAR) | 949 million |
| One year total return | 1.01% |
| Return year-to-date | -15.38% |
| Current price (ZAR) | 60.25 |
| 52 Week high (ZAR) | 82.00 |
| 52 Week low (ZAR) | 56.65 |
| Financial year end | - |
| Closing paragraph | The ETF has come under severe pressure this year and the current price level is seen as an attractive entry point. Expect moderate to high volatility going forward. |
Buy/Sell Rationale
Technical Analysis:
Fundamental view:
| Share Name and position |
QLT - BUY (Continue to hold) |
INL - BUY (Continue to hold) |
LHC - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 18.95 | 105.00 | 20.53 |
| Current | 20.18 | 109.75 | 21.45 |
| Movement | 6.5% | 4.5% | 4.5% |
| Summary text |
The share recently crossed above its 200-day simple moving average and continues to form a base. Upside momentum in the price supports the trade.
Our profit target is R22.50, with a trailing stop-loss at R18.65. Exit the trade around 30 October 2023. |
Based on the RRG analysis, the share remains attractive, particularly due to its ability to stay above the 200-day simple moving average. Upside momentum supports the trade.
Our profit target is R121, with a trailing stop-loss at R103.50. Exit the trade around 30 October 2023. |
The price appears to be in the upper range of a declining channel pattern, and this remains of interest. The share remains above its 200-day simple moving average. Upside price momentum continues to support the trade.
Our profit target is R27, with a trailing stop-loss at R18.85. Exit the trade around 6 November 2023. |
| Share Name and position |
DCP - BUY (Continue to hold) |
ANH - BUY (Continue to hold) |
DSY - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 24.12 | 1061.66 | 152.50 |
| Current | 24.43 | 1057.19 | 146.33 |
| Movement | 1.3% | -0.4% | -4% |
| Summary text |
Continues to display signs of a bullish divergence. The share price remains below its 200-day simple moving average, and we maintain the counter-trend strategy. The price also seems to be building a base.
Our profit target is R29, with a trailing stop-loss at R22. Close the position around 29 December 2023. |
The price seems to be forming a base and this remains of interest. The share continues to test the 200-day simple moving average. Fading downside momentum is supportive of the trade.
Our profit target is R1 174, with a trailing stop-loss at R1 013. Exit the trade around 13 November 2023. |
A developing symmetrical triangle pattern remains of interest. The share remains just above its 200-day simple moving average. Downside price momentum, however, is a concern.
Our profit target is R182, with a trailing stop-loss at R135. Time to exit: 27 May 2024. |
