In last week’s article on Grand Parade, we drew your attention to the importance and usefulness of downward(drawn above a ) in establishing the best point to buy a . This week we draw your attention to the benefit of upward trendlines (drawn below a rising trend) as a method of determining when a share, with a strong rising trend, has corrected back to its trendline and is therefore at a buy point. Consider the :
Here you can see theof Transaction Capital (TCP) before the . We have drawn in the strong rising trendline which is supported by six “ ” (the green arrows) indicating that it is a very reliable.
On the 20th of May 2019, in an article, we drew your attention to the rising trend in Transaction Capital, (Click here to read) when it was at a of 2020c. We suggested that it was a good buy at that time. Obviously, TCP was then in a strong rising trend, but it was then impacted by the COVID-19 V-bottom in March 2020. Today, at the point following its recent , it is trading for 4192c – which is a gain of 107,5% over the time since we wrote that article. The low point which it reached last Friday places it almost exactly on its upward trendline – which is a compelling indication that it has probably fallen as far as it is going to go in this cycle. In other words, it is a great opportunity to buy some of these shares before they resume their upward trend.
TCP is arguably the best suited of all- to the conditions which now exist in the new South Africa. It has three divisions, each of which is growing rapidly, exploiting specific growing trends in our economy:
- SA Taxi dominates the mini-bus taxi industry in this country financing, repairing, insuring, and refurbishing the taxis which have become an indelible feature of our roads over the past 20 years.
- Transaction Capital buys up the
- WeBuyCars is TCP’s latest , and it dominates the second-hand car industry in South Africa. With at record highs following COVID-19, this is a company that exploits the fact that most consumers cannot afford to buy a new car, and many are trading down to cheaper vehicles.
In their recently published https://senspdf.jse.co.za/documents/2021/JSE/ISSE/TCP/FY21_SENS.pdf) for the year to 30th September 2021, TCP reported that all three divisions had recovered well from COVID-19 and were showing rising . Overall, the company reported a record core from of R1005m which was 27% higher than in 2019 and 264% up on 2020.(
We suggest that this share should be part of any’s and should be further accumulated on any weakness.
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