Clientele Limited’s (JSE: CLI) share price is currently on track for a third consecutive week of losses but remains over 4.17% year-to-date and over 8.3% in the past 52 weeks. The recent decline comes despite the company’s positive development, including the acquisition of 1Life Insurance in November 2023. This strategic move brings together two industry stalwarts, promising synergies and growth opportunities in the mass market segment.
This acquisition is expected to be finalized by June 2024, creating a combined entity with an embedded value of R7.8 billion and 1.5 million contracts, strengthening its position in the mass market segment. The merged company is expected to benefit from operational efficiencies, enhanced client service capabilities, and a wider product offering.
Technical Analysis:
The weekly chart shows that the share price is currently trading flat at 1,125 cents within an ascending triangle pattern. This pattern suggests a potential bullish bias, with an upward breakout offering short-term trading opportunities. The share price trades comfortably above all key Simple Moving Averages (SMAs), including the 50-SMA (blue line), 100-SMA (orange line), and 200-SMA (red line). This further reinforces the bullish bias.
The Relative Strength Index (RSI) sits at 53.47, indicating neither overbought nor oversold conditions. However, its flat trajectory suggests a lack of momentum. Short-term trading opportunities towards the triangle’s resistance at 1,200 cents should the bulls sustain the push higher. A successful bridge of the initial resistance on significant volume could trigger a run, with the 1,335 and 1,450 price levels acting as the next significant levels higher.
However, a break below the triangle could offer short-term trading opportunities towards the initial support at the 1,026 cents price level. A break below the initial support on significant volume would leave the 921 cents within the bears’ reach in the near term.
Summary
Clientele Limited’s share price is currently caught in a consolidation phase within an ascending triangle pattern, navigating a complex landscape, facing short-term losses but backed by strong year-to-date and 52-week performance. A sustained push above the triangle’s resistance at 1,200 cents, particularly on significant volume, could trigger a potential breakout and run towards the 1,335 cents and 1,450 cents price levels. Conversely, a break below the triangle’s support at 1,026 cents could indicate a shift in momentum and lead to a decline towards the 921 cents level.
Sources: TradingView, MoneyWeb, Clientele.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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