Oil, Gas and Coal make every “Go Green” enthusiast cringe, and while decarbonisation is the latest buzzword in this space, one local share becomes a focal point.
It’s non-other than Thungela Resources Limited (JSE: TGA), which became a firm favourite for retail investors over the pandemic, reaching unfathomable gains and dividend payouts to its followers.
But the fan fair has died down over the last year as commodity prices and demand have fallen significantly over the previous year, as seen in the chart below. Crude oil (dark blue) is lower by 36%, and Natural Gas (light blue) and Coal (orange) are also lower by 69% and 59%, respectively, over the last year, which does not boast well for resource companies.
Technicals
The price action on Thungela has been in a steady downtrend since the start of the year after breaking down from the higher timeframe, head and shoulders technical pattern. In April, the price action gapped significantly lower and is still trading below the R178.76 resistance (green line) level, which will be watched closely for a gap close.
The price action on the coal giant could possibly continue lower to the following primary support level at R145.93 (black dotted) if the current negative market sentiment continues. We need to see the share price close above the significant resistance at R178.76, supported by positive fundamentals to negate the current down pressure.
Summary
The R178.76 resistance level (green line) becomes a focal point for a gap close driven by an increase in volume to negate the current short-term downtrend. If the bears continue to drive prices lower, then the R145.93 (black dotted line) support level comes into focus.
Sources: Thungela Resources Limited, Koyfin, TradingView
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