South32 Ltd (ASX:S32) HEFFX Highlights

South32 Ltd (ASX:S32) HEFFX Highlights

South32 Ltd (ASX:S32) HEFFX Highlights

South 32, the spin-out of orphan assets from mining giant BHP Billiton, has benefited handsomely from the surge in metal prices in the latter part of 2016, but has opted to hang on to a large chunk of its cash.

The miner earned a net profit of $US620 million ($804 million) in the half, a reversal from its $US1.7 billion loss a year earlier, which was due primarily to asset write-downs. Earnings a share came in at US11.7¢, up from a US32.9¢ loss per share the year before.

South32 Limited is a metals and mining company. The Company’s segments include Worsley Alumina, which includes an integrated bauxite mine and alumina refinery in Western Australia; South Africa Aluminium, which includes an aluminum smelter in Richards Bay; Brazil Alumina, which includes an alumina refinery in Brazil; Mozal Aluminium, including an aluminum smelter in Mozambique; South Africa Energy Coal, including open-cut and underground energy coal mines and processing operations in South Africa; Illawarra Metallurgical Coal, which includes underground metallurgical coal mines in New South Wales; Australia Manganese, which produces manganese ore in the Northern Territory and manganese alloys in Tasmania; South Africa Manganese, which produces manganese ore and alloy in South Africa; Cerro Matoso, including an integrated laterite ferronickel mining and smelting complex in Colombia, and Cannington, including silver, lead and zinc mine in Queensland.

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 2.72.

The projected upper bound is: 3.07.

The projected lower bound is: 2.76.

The projected closing price is: 2.91.

SOUTH32 FPO closed up 0.060 at 2.910. Volume was 29% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open       High        Low         Close      Volume
2.890      2.930      2.880      2.910      15,929,754

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period         50-period        200-period
Close:                       2.81                   2.70                  2.71
Volatility:                47                      37                      48
Volume:                  21,243,846      21,807,696      24,215,046

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

SOUTH32 FPO gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
SOUTH32 FPO is currently 7.4% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of S32.AX at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on S32.AX and have had this outlook for the last 20 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 69.0266. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 61.44. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 201 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 144.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 4 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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