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The Traders Forum Tuesday 26 th February 2013 Presenters: Shaun van den Berg Head of Client Education Head of Client Education Travis Robson Trading &

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Presentation on theme: "The Traders Forum Tuesday 26 th February 2013 Presenters: Shaun van den Berg Head of Client Education Head of Client Education Travis Robson Trading &"— Presentation transcript:

1 The Traders Forum Tuesday 26 th February 2013 Presenters: Shaun van den Berg Head of Client Education Head of Client Education Travis Robson Trading & Relationship Manager Trading & Relationship Manager

2 Introduction CFD versus Equities Upcoming Webinars The Stockbroker (Technical analysis) Trade Ideas Technical Trading Technical Market Overview The Investor (Fundamental analysis) Long-term Investment Opportunities Open the Floor Summary & ConclusionAgenda

3 CFD versus Equities CFD Trade Equity Trade Details Instrument Exposure Brokerage Cost STT & STRATE Price (Cents) Initial Margin 15% % of Exposure Total Costs 14% VAT 500 ABC shares 6000c 6000c R30 000 None R120.00 R85.92 R37.45 R16.80 R136.80 R390.87 0.46% 1.30% R4 500 R5 250 Initial Margin 17.5% R30 000 R267.50

4 Learn to trade Equity Derivatives Webinar –Date: Wednesday, 13 March 2013 / Time: 13:00 14:00 Topics Covered: –Platform overview for CFD & SSF –Technical Trading - resistance / trend lines / chart patterns –Technical Market Overview –Trading plan - Stop loss / take profits / buying levels –Psychology of trading & Trading ideas Advanced Technical Analysis (Candlesticks) –Date: Wednesday, 20 March 2013 / Time: 13:00 14:00 Topics Covered: –Introduction to Candles –Major candlestick signals – Bullish and bearish patterns –Choosing support and resistance levels –Trade ideas using candlesticks with other TA tools Upcoming Webinars **Please note limited to 100 people

5 The Stockbroker Technical & Trade Ideas

6 The Stockbroker

7 Professional traders focus on limiting risk and protecting capital. Amateur traders focus on how much money they can make on each trade. Professionals always take money away from amateurs. Stay relaxed. Place trade and set stop loss. If you get stopped out, who really cares? You are doing your job. You are actively protecting your capital. Professional traders actively take small losses. Amateurs resort to hope and sometimes prayer to save their trade. Jacques Magliolo: “Become your own Stockbroker” Quote: Trading Wisdom

8  Woolies (WHL)  PPC (PPC)  Vodacom (VOD)  Steinhoff (SHF)  New Gold (GLD)  Sasol (SOL) Trade Ideas

9 Woolies (WHL) 16.1.2013 Instrument: CFD / SSF Direction: Buy / Long Entry: 6470c Take Profit: 7200c Stop loss: 6190c (5950c)

10 Woolies (WHL) 11.2.2013

11 Woolies (WHL) 26.2.2013 Direction: Buy / Long Entry: 6470c Take Profit: 68.85c Return: 6.45%

12 PPC (PPC) 26.2.2013 Instrument: CFD / SSF Direction: Buy / Long Entry: 3385c Take Profit: 3650c Stop loss: 3301c

13 PPC (PPC) 26.2.2013 Breakout?

14 Vodacom (VOD) 22.2.2013 Instrument: CFD / SSF Direction: Buy / Long Entry: 11825c Take Profit: 12500c Stop loss: 11500c

15 Vodacom (VOD) 26.2.2013 Breakout?

16 Steinhoff (SHF) 26.2.2013 Daily

17 Newgold (GLD) 26.2.2013

18 Sasol (SOL) 25.2.2013


20 Technical Analysis Support & Resistance / Trend Lines / Chart Patterns

21 Resistance Support Resistance Support Resistance Support & Resistance levels highlight possible “turning points” Support Resistance Support Support & Resistance

22 Support Trend Line Resistance Trend Line Support Trend Line Resistance Trend Line As long as the price stays above/ below the Support or Resistance lines, the trend is either bullish or bearish Trend Lines

23 Double Top Double Bottom Head & Shoulders (Top) Inverse Head & Shoulders Falling Wedge Rising Wedge Broadening Formation Reversal Patterns

24 Double Top Pattern – Mr Price (MPC) Double Top Pattern? Double top: Refers to the rise of a stock's price, a drop, and then a rise back to the same level as the original rise – all occurring after a significant rally. Bearish

25 Double Bottom Pattern – Impala (IMP)

26 Rising Wedge – The Foschini Group (TFG) Rising Wedge?

27 Head & Shoulders – Barloworld (BAW) 8.2.2013 H&S? Head & Shoulders price target: the minimum target is the height of the pattern to the “neckline” projected downwards from the breakdown point.

28 Head & Shoulders – Barloworld (BAW) 12.2.2013 H&S?

29 Double Bottom or H&S? – Woollies (WHL) 8.2.2013 Double Bottom? Inverse Head & Shoulders?

30 1 5 2 3 4 Rectangle Formation Symmetrical Triangle Flat Top or Ascending Triangle Flat Bottom or Descending Triangle Continuation Patterns

31 Symmetrical Triangle - (Stanbank) (SBK)

32 Rectangle Formation (Massmart) (MSM)

33 Flat Tops (Aspen) (APN)

34 Technical Market Overview

35 S & P 500 Index Bullish Support Resistance Rising Wedge?

36 Brent Oil Bullish Resistance Support Resistance Support

37 Brent Oil…. Sasol 25.2.2013 Resistance Support

38 Gold $ Bearish Resistance Support Resistance Resistance Support Channel

39 Platinum $ Bullish Support Resistance Support / Resistance Support

40 JSE Platinum Mining Index Bearish Bearish Support / Resistance Support / Resistance Resistance / Support

41 Rand $ Resistance Channel Support ZAR Weakness ZAR Weakness Resistance Support

42 JSE Top 40 Index Bullish Bullish Resistance Resistance Support Support

43 JSE Food Index Bullish Bullish Support Resistance Resistance Channel

44 S&P 500 Index –Bullish –Becoming Overbought Brent Crude Oil –Bullish Gold $ –Bearish / Down channel Platinum $ Bullish Rand $ Bearish / Up channel Summary: Technical Overview JSE Top 40 Index Bullish Oversold? JSE Platinum Bearish Oversold Testing support JSE Food Bullish Up channel

45 Fundamentals & Long-term Share picks The Investor

46 Bi-monthly newsletter One Share Spot Long-term equity investor Positives & Negatives Technical View Recommendation Equity Account 3-year view

47 Methodology Step 1: Click Research Step 2: Click Search PEG ratio (PE%) is less than or equal to 85% Quality rating (%) is greater than 70%

48 Methodology

49 IFR recommendations 2012 - 33% 2012 - 20% 2012 - ALSI 40 22%

50 IFR recommendations

51 Sasol (SOL) Bowcalf (BCF) Sunint (SUI) Hudaco (HDC) The Investor - Share Picks Email to be added to The Investor mailing Open DateStockEntry25.2.2013P&L %P&L % 20121206SOL355003914610.27% 20130117BCF7607853.29% 20130130SUI9870102904.26% 20130214HDC970099902.99%

52 Sasol (SOL)


54 We like Sasol because: Its 100% Quality Rating, which is a combined measure of a number of financial ratios of a company. PSG Online considers a company with a quality rating above 70% as a good quality company. The company has a strong cash flow. It has excellent operating margins of over 23.3%. It has return on equity (ROE) is 23%. The group has managed to contain costs and successfully deleveraged its balance sheet, giving it ample room for future growth. It is trading at 1.7 times its NAV. The share price is underpinned by an attractive dividend yield of 4.7%.Positives

55 We are concerned about: Sasol’s vulnerability to a number of external factors beyond management’s control, such as oil price and exchange rate movements. The possible impairment of its share in the Arya Sasol Polymer plant, which it would have to divest of, given the continued uncertainty over sanctions relating to Iran’s nuclear fuel program and the devaluation of the country’s currency. Exposure to Europe currently experiencing weaker demand, which would hit Sasol’s profitability. The level of gearing is likely to return to the group’s targeted range of 20% to 40% in the medium term as its large capital intensive growth program and gas acquisition strategy gains momentum. Negatives

56 Sasol (SOL) (Weekly)

57 Bowcalf (BCF)


59 Positives We like Bowcalf because: A weaker exchange rate will provide more relief from imports. We expect an improved contribution from the Gauteng bottling plant in the medium-term. Historically, it has strong cash generation. Bowcalf has an ungeared balance sheet. Operating margins could possibly return back to the long-term average, which will affect earnings positively. It has return on equity (ROE) has upside potential from the current 14.0% The share offers value as it is trading at a historic P/E ratio of 10.7 times. The share is trading at a 40% premium of its NAV of 535cps. It offers an attractive dividend yield of 4.8% assisted by its high dividend pay-out ratio.

60 We are concerned about: The possibility of a lower than anticipated uptake at the Gauteng bottling plant. Bowcalf’s vulnerability to repeated exposure to a number of external factors, including the supply of CO 2 to their filling operations and industry- wide labour disruptions within the plastics divisions. Continued above-inflation growth in operating costs (i.e. electricity and labour costs)Negatives

61 Bowcalf (BCF) (Weekly)

62 Sunint (SUI)


64 We like Sunint because: It has an attractive portfolio of operations spread across all the economic centres in South Africa. The group is establishing a foothold in other emerging countries such as Chile. Sunint boasts a solid track record with good margins and exceptionally high return on equity (ROE%). It has strong cash generation. Sunint is considered a defensive share due to its nature of its operations. The share is trading on a rolling P/E ratio of 15.5 times, which we consider as fair value. Moat – There are limited casino licenses. Sun International recently announced that it is considering a new casino licence in Panama.Positives

65 We are concerned about: The exclusivity of the Western Cape licence (Grandwest) as there is speculation that one of the other Western Cape licences may relocate to the Cape Town metropole. The over-capacity in the hotel industry as it is likely to result in a lack of pricing power, and low occupancy rates. The high level of gearing, its low interest cover, as well as the regulatory environment.Negatives

66 Sunnit (SUI) (Weekly)

67 Hudaco (HDC)

68 We like Hudaco because: It delivered a solid set of results despite the difficult trading environment with illegal strikes in the mining sector. It is a good quality company, trading on a quality rating of 75%. It boasts a consistently high ROE, healthy operating margins, as well as a strong balance sheet. The share does not seem expensive as it trading on a rolling Price / Earnings (PE) ratio of 8.9 times and at 1.9 times its Net Asset Value (NAV). The share is also underpinned by a solid dividend yield of 4.9%.Positives

69 We are concerned about: Hudaco’s exposure to markets that rely on consumer spending as consumer spending is slowing down. The group is exposed to exchange rate volatility, which affects its operations and its customers. The South African Revenue Service (SARS) is disputing Hudaco’s leveraged BEE structure, as well as disallowing STC credits, claiming that it was a scheme to avoid paying tax. The contested amount is approximately R1.6-billion, of which R987-million relate to penalties. The share price has discounted the SARS tax assessment by pulling back sharply.Negatives

70 Hudaco (HDC) 8.2.2013

71 Open the Floor

72 Information session –Open a trading account –Add more funding –Trade and invest Subscribe to tools –The Stockbroker (CFD & SSF traders) –The Investor (Long-term Equity investors) Look out for –Upcoming Webinars (SSF/ CFD & TA) Good Luck & Happy Trading! Summary: The Traders Forum

73 Contact us Travis Robson (011) 996 5204 Shaun van den Berg (011) 996 5254

74 This publication has been issued by PSG Online. It is confidential and issued for the information of clients only. It shall not be reproduced in whole or in part without our permission. The information contained herein has been obtained from sources which and persons whom we believe to be reliable but is not guaranteed for accuracy, completeness or otherwise. Opinions and estimates constitute our judgement as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This report is provided for informational purposes only. No information contained herein, no opinion expressed and no recommendation made constitutes a representation by us or a solicitation for the purchase of any of the securities mentioned herein and we have no responsibility whatsoever arising here from or in consequence hereof. Securities, financial instruments or strategies mention herein may not be suitable for all investors and investors must make their own investment decisions using their own independent advisers as they believe necessary and based upon their specific financial situations and investment objectives. The employees of PSG Online may from time to time own securities mentioned herein. Analyst Certification The research analyst who prepared this report certifies that the view expressed herein accurately reflect the research analyst’s personal views about the subject security and issuer and that no part of his compensation was, is or will be directly or indirectly related to specific recommendations or views contained in this report. Disclaimer

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