Afrimat Limited (JSE: AFT) has recently unveiled its latest interim reports, igniting a remarkable surge of over 6.5% in its share price. Their revenue advanced by an impressive 9.6%, reaching R2.8 billion, while their operating profit scaled new heights, up by 4.3% to an astounding R534.1 million.
The headline earnings per share (HEPS) also witnessed a noteworthy increase of 4.4%, totalling 263.4 cents. Notably, their operating margin has strengthened to an impressive 18.8%, and they’ve declared an interim dividend per share of 40 cents.
Afrimat’s commitment to strategic investments in projects poised to yield favourable outcomes has positioned it to diversify and broaden its revenue streams effectively. The enthusiastic response from the market is vividly reflected in their share price, marking a substantial 4.6% expansion this week. Afrimat Limited is truly constructing a compelling path to success and prosperity.
Technical
On the 1W chart, a breakout from the falling wedge has sustained but ultimately became a victim of a strong supply zone that reversed the momentum into a descending channel formation. However, the 25-SMA (green line) looks poised to overlap with the 100-SMA (orange line), suggesting a momentum shift in the share price’s trajectory.
The 50-SMA (blue line) currently presents resistance at R53.94, preventing the share price from breaking through the dynamic resistance of the channel. Should this level falter in the week’s closing session, the share price could run toward R57.42. The demand zone at R61.58 could then be the next hurdle for the buyers to cross in the upcoming weeks.
However, should the 50-SMA contain the bulls, the price could retreat toward support at R47.93. At this level, the channel’s support could underpin the price momentum, potentially providing buyers with the opportunity to maintain the channel formation. The price could then consolidate between R47.93 and R53.82 as the bulls and bears engage in a tug-of-war.
Summary
After their optimistic earnings report, investors have reacted favourably to Afrimat’s share price advance. Currently, it is on track for a 4.6% weekly rise, and with the resistance at R53.94 under pressure, there could be another twist in the Friday session. However, with a long wick present on the upside, it is possible that the rally lost steam, which could see the price consolidate within the channel, backed by support at R47.93.
Sources: Koyfin, Tradingview, Afrimat Limited
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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