The resurgence in crude oil prices could not keep the diversified energy and chemicals company Sasol Limited’s (JSE: SOL) share price above critical technical levels.
After mixed results at the start of the year, which showed muted profit growth as higher oil prices and a weaker local currency were offset by operational difficulties, SOL’s share price continued lower. Sasol’s CEO, Fleetwood Grobler, is also stepping down from his position at Sasol next year and will announce the new CEO in the first half of 2024. South Africa’s second-largest emitter of greenhouse gases is also stepping up its ESG efforts. It has taken the initiative to comply with environmental protection standards and is targeting a 30% reduction in emissions by 2030.
Technicals
Looking at the weekly chart of Sasol Limited, we can see the price action has broken the uptrend in March and has started to move lower as fundamental pressures persist. The R255.81 resistance level (red line) is firmly in focus, and the price needs to hold above this resistance to negate the current downtrend.
A closer look at Sasol’s Daily time frame shows that the price action gapped higher after OPEC announced their surprise cut to oil outputs. This drove the SOL share price firmly to the R255.81 resistance level, which is holding. This could signify an opportunity for short-term traders if the bears take control. If the price moves lower, we could expect the R250.00 and R240.00 support levels to return to the focus of bearish sentiment traders.
Summary
The possibility exists that the bears can take control and drive prices lower while Sasol’s fundamentals remain under pressure, bringing the support levels into focus. We could see possible scalping opportunities for the bulls when the price reached the R250.00 and R240.00 support levels.
Sources: Sasol Limited, OPEC, Bloomberg, Koyfin, BusinessDay, TradingView
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