$JSEPPC had more of its fair share of attention in the media during the past week, in my view, and I am not all too sure if it was for the right reasons. As I see things, the two main points were the actions of the Public Investment Corporation (PIC), who sold a great part of its holding in PIC below 50c per share not so long ago, and is now buying at well over R5-00. The second issue is that government has decided that only local cement may be used in projects of all levels of government. With so many blunders under their belt during the recent past, I am not sure if the involvement of the PIC would be of any benefit to the share price. On the contrary, it would make me more cautious. I have read that 12% of cement used in our country are currently imported. With a total of six companies in this business, how much could this new regulation help each one of them? As for an increase in economic activity not only locally but world wide as well, I think the jury is still out on that one.
Having considered the above, I would prefer to look at charts rather and for a really longer term view I always prefer the monthly chart. However, you could do yourself a favour and look at the daily chart as well. With a number of technical indicators this counter is now grossly overbought and certainly needs some cooling off. Then even on the weekly and monthly charts matters look only slightly better, precisely for the fact that the share had an enormous rally over the last year or so. The biggest concern to me currently is that there is a reverse divergence between the price and the RSI not only on this chart, but on the weekly as well. A certain sign to me that the price might be hitting a wall soon.
Lastly, I want to mention another one more concerning thing. In April 2020, after many hours of research, I wrote an article on my blog coming to the conclusion that most listed shares (75%) are, over time, actually wealth destroyers. Having watched hundreds upon hundreds of longer term charts over a number of years, it seems to me this company will always qualify for that group as well. It has been 14 years since PPC was on a high of over R33. There are a big lot of charts looking like this one, but the counters who do make it back to former glory, are really the exception rather than the rule.
Having considered the above, I would prefer to look at charts rather and for a really longer term view I always prefer the monthly chart. However, you could do yourself a favour and look at the daily chart as well. With a number of technical indicators this counter is now grossly overbought and certainly needs some cooling off. Then even on the weekly and monthly charts matters look only slightly better, precisely for the fact that the share had an enormous rally over the last year or so. The biggest concern to me currently is that there is a reverse divergence between the price and the RSI not only on this chart, but on the weekly as well. A certain sign to me that the price might be hitting a wall soon.
Lastly, I want to mention another one more concerning thing. In April 2020, after many hours of research, I wrote an article on my blog coming to the conclusion that most listed shares (75%) are, over time, actually wealth destroyers. Having watched hundreds upon hundreds of longer term charts over a number of years, it seems to me this company will always qualify for that group as well. It has been 14 years since PPC was on a high of over R33. There are a big lot of charts looking like this one, but the counters who do make it back to former glory, are really the exception rather than the rule.