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Online Share Trading

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Buy Banks...oversold?

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DEP
Super Contributor
Buy banks... should rebound from an over sold position.
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13 REPLIES 13
DEP
Super Contributor
Most bad news facted in... Shorts are covering fast!!!
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Electrox
Super Contributor
This could be the bottom! SBK up 4% and banks on LSE up nicely.. BuT I will wait for confirmation though than calling bottoms
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Not applicable
Aaah, optimists. Why not rename this thread to "Inflation coming down sharply. Petrol prices halve. House prices shooting up. Plight of SA consumer looking up."
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DEP
Super Contributor
Most of those bad news have been facted in banks, hence they are trading at 5 - 7 P.E. I see value in banks at these prices, does not mean that this applies to everyone, others see more downward pressure on banks.
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platsak
Super Contributor
Dep. Definately value in the shares from a long term wiev. Just be sure to set (and keep to) a stoploss. This recovery may be short term with lower lows to come.
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platsak
Super Contributor
Dep. See discussion on other banking post on the matter as well.
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barry_1
Super Contributor
Correct Vitorc,how many times recently have we heard that all the bad news is factored in?....In Aug it will depend on the fact of whether the Reserve bank ups rates again and then what Tito says about further rate hikes....then only if inflation is held and seen to be declining that Financial and property will really take off....of course nothing wrong with a short run in the mean time as long as u are out before the next bank meeting.
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DEP
Super Contributor
Short term bounce upwards :-), maybe 10% on the banking index. What do you think?
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platsak
Super Contributor
Dep. My personal opinion is not to be to hasty to enter. Theres a lot of people that have already lost a lot (I think Im leading the pack) with Financials precisely on this chain of thought. Tread very careful. Heres yesterdays tech analysis from SBK: Bearish: The Banking Index may have completed its medium-term double-top pattern. It is testing the targeted support level of 25,820, and, with its mega-oversold RSI, a reversal could be underway. However, the index would have to escape its bear trend (or trade above 29,870) to confirm a strong recovery (but, movement above 28,160 is positive). Thereafter, we would foresee upside to the 34,850 resistance level, with further surging to the 37,365 mark which is also the resistance trendline (previously known as the support trendline) of its primary bull trend. NOTE: Failing to escape its bear trend would bring breaching the 25,820 low into sight. Next support thereafter would be at 20,830. We recommend investors stay short, but close the short position upon a positive break-out. Support level: 25,820 (followed by the 20,830 level) Resistance level: 29,870 (followed by the 34,850 level)
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Not applicable
And don't go on P/E. E is shrinking as we speak.
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Not applicable
... and it looks like Absa at least may close down
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Pam_1
Regular Contributor
Thanks but I remain a bank bear for now. I will likely enter banks only when the interest rate cycle turn, maybe ~Apr 2009. And at Dec 2009 when you oukes break even on SBK I hope to be rich...
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sk_1
Super Contributor
On the 15th of may I suggested that SBK could come down to the mid seventies and unfortunately I was right.. fortunately I excercised my stoploss then.
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