Diversified software company Adobe Inc. develops, markets and provides support for computer software products and technologies. The company offers a line of application software products, type products, and content for creating, distributing, and managing information - including popular platforms such as Adobe Reader, Acrobat, and Creative Cloud
Technically, symmetry in the share price makes for an attractive investment option (see the insert on the main chart). This means that price movements on one side of a certain point or trendline mirror those on the other side (see the black dotted trendline on the main chart as well as the insert).
If a stock previously exhibited symmetrical price movement and is currently approaching a trendline or point of resistance, investors may look for a similar move on the other side of that level if it is broken.
According to the Relative Strength Index (RSI), the stock will be in overbought territory above $445. This makes our profit target of $440 realistic.
We suggest a low at-risk allocation for this trade.
FNB has two ETNs, namely ADETNQ (without currency exposure) and ADETNC (with currency exposure) that be used as a replication instrument for Adobe. These are listed on the JSE and provide indirect exposure to the company.
Share Information
| Share code | ADBE |
|---|---|
| Industry | Software & Services |
| Market capatalisation (ZAR) | 171.23 billion |
| One year total return | -19.93% |
| Return year-to-date | 10.96% |
| Current price(ZAR) | 373.40 |
| 52 weeek high(ZAR) | 473.49 |
| 52 week low(ZAR) | 274.73 |
| Financial year end | December |
| Closing paragraph | The share has already captured upside movement year-to-date. Several technical indicators are pointing to renewed upside momentum. The share is trading at a beta of 1.3, indicating that the share is more volatile than the overall market. |
Consensus Expectations (Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 13.71 | 15.50 | 17.58 | 20.10 |
| Growth (%) | 13.06 | 13.41 | 14.33 | |
| Dividend Per Share (ZAR) | - | - | - | - |
| Growth (%) | - | - | - | |
| Forward PE (times) | 24.09 | 21.24 | 18.58 | |
| Forward Dividend Yield (%) | - | - | - | |
| Closing paragraph | Solid growth is expected over our forecast horizon. Expect moderate fluctuations in the share price. | |||
Buy or Sell Rationale
Technical Analysis :
Long term fundamental view:
| Share Name and position | ATVI - Profit take (Close the position) | BDRY - BUY (Continue to hold) | KR - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 77.71 | 9.05 | 46.91 |
| Current | 84.35 | 9.46 | 48.92 |
| Movement | 8.5%% | 4.5% | 4.3% |
| Summary text | The share reached our profit target and we closed the position. |
The price is currently in an accumulation phase and tested its 200-day simple moving average.
Our take profit target remains at $12 with a trailing stop-loss at $8.20. We plan to exit the position on 21 June 2023. |
The stock remains above its 200-day simple moving average.
Our take profit target remains at $52 with a trailing stop-loss at $46.60. We plan to exit the position on 7 June 2023. |
| Share Name and position | CBOE - BUY (Continue to hold) | XLK - BUY (Continue to hold) | AAPL - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 127.18 | 139.66 | 153.71 |
| Current | 131.77 | 144.15 | 157.65 |
| Movement | 3.6% | 3.2% | 2.6% |
| Summary text |
The defensive nature of the stock remains of interest. Remains above its 200-day simple moving average.
Our take profit target remains at $144 with a trailing stop-loss at $125. We plan to exit the position on 2 June 2023. |
The price is currently testing the upper range of a declining channel pattern. Remains above its 200-day simple moving average.
Our take profit target is set at $156 with a trailing stop-loss at $137.50. We plan to exit the position around 24 May 2023 |
The price is retracing from the lower range of a linear regression channel pattern. The stock remains above its 200-day simple moving average.
Our take profit target is set at $170 with a trailing stop-loss at $148.60. Exit the position around 16 June 2023. |
