Recommendation: Buy Newplat [NEWPLT - on the GT Trading Platform]
Long-Term Trend: Sideways
NewWave Exchange Traded Notes (ETNs) constitute unconditional, unsecured and unsubordinated obligations of Absa Bank Limited, listed on the JSE Limited.
The NewWave Platinum ETN is designed to provide investors with cost-effective exposure to the spot price of platinum in a listed instrument trading in South African rand. Each NewWave Platinum ETN is equivalent to approximately 1/100th of an ounce of platinum (less investor fees).
Platinum is a well known precious metal traded in US dollar per fine ounce.
(Monthly)
- Occasionally we look at long-term charts, and the platinum price in rands has held onto important support at line 2. It followed through to the upside last month which is a good sign.
- What I particularly like here is a bullish divergence on its monthly Stochastic (on top), coupled with the fact the price is near important support (line 2 and line 1).
- This makes it a low risk buy for investors.
- The rand platinum price is traded via the locally listed ETF, Newplat (JSE code: NGPLT). It can be bought at current levels. But not aggressively. If it gives a monthly close above line 3 (13 675) (or 136.00 on Newplat itself) then it can be bought more aggressively.
- If it gives that breakout above line 3, it will target crucial long-term resistance at line/s 4 (16 250-16 600) (certainly not short-term).
- The stop-loss though is a monthly close below 11 700 (its June low), below line 2.
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