Momentum Metropolitan Holdings’ (JSE: MTM) share faces a third consecutive session of losses, declining by over 0.7% on Monday. Despite a year-to-date decrease of 7.6%, the stock has shown resilience with a 9% appreciation over the past 52 weeks.
The current trading price of 2,021 cents reflects a slightly negative trend from the opening but maintains an overall positive trajectory. Momentum Metropolitan recently reported historic peak normalized headline earnings of R5.1 billion for the 12 months ending June 2023, signifying a robust 31% increase in operating profit compared to the previous year. Shareholders are being rewarded with increased dividends, featuring a 20% rise over the prior year and a share buyback program of R500 million.
The appointment of Mr. Hilgard Pieter Meyer as a non-executive director further enhances the company’s board with his 36 years of actuarial experience. His tenure as Group CEO until 2023 and subsequent return as a non-executive director brings a wealth of industry insight and leadership to the board.
Technical Analysis
The daily chart reveals a share price of 2,021 cents trading below the 50-SMA (blue line) and 100-SMA (orange line), indicating a short-term downtrend. However, the price remains comfortably above the upward-sloping 200-SMA (red line), suggesting underlying bullishness.
With the RSI (45.37) trading flat around the 50.00 level, continued declines could find significant support at the 200-SMA and the horizontal range’s support. A break below the initial support on significant volume would leave the 1,847 cents and 1,741 cents as the next levels of interest lower.
Conversely, the recent swing high of 2,140 cents could come into focus should the price action find support in the near term. A successful bridge of the initial resistance could propel the share toward the range’s resistance at 2,225 cents and 2,311 cents next.
Summary
MTM’s fundamentals are positive, with strong financials and shareholder-friendly initiatives. Technically, the outlook is neutral, with support and resistance levels established. Significant support sits at 1847 cents, while resistance lies at 2140 cents and potentially higher.
Sources: TradingView, Momentum Metropolitan, Reuters, News24.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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