Truworths International Limited (JSE: TRU) witnessed a 0.39% increase in share value today, maintaining a positive trend with a 1.46% rise over the previous month and an impressive year-to-date surge of 29.29%. The company’s retail sales showed contrasting performances between its African and UK segments. While Africa experienced a mere 1% growth, the UK’s Office saw a substantial 38.8% increase, with online sales contributing significantly.
However, challenges persist in South Africa’s retail sector due to economic pressures affecting consumer spending. Truworths remains cautiously optimistic, banking on moderate inflation and potential interest rate relief to boost household spending. Despite a challenging environment, the company aims to leverage its account portfolio strength and invest in technology for sustained growth.
Technical Analysis
The 1-day chart shows that Truworths’ current price stands at 7,676 cents, trading flat around the 50-SMA (blue line) within an ascending channel trading pattern. Price action trades well around the upward-sloping 50-SMA (blue line), well above the 100-SMA (orange line), and rising 200-SMA (red line).
The 100-SMA recently broke above the 200-SMA but still trades below the 50-SMA. RSI is trending flat following the slight downward, RSI = 45.51 and flat RSI-based MA = 54.25.
Short-term trading opportunities towards the 8,033 cents resistance level could arise should the bulls sustain a push above the 50-SMA. A break above the initial resistance could confirm the bullish momentum, likely bringing the 8,435 cents resistance level within the bulls’ reach in the short term.
However, a break below the 50-SMA would leave a potential for continued bearish pressure towards the 7,409 cents support level. A break below the initial support could trigger a run lower and would likely bring the 7,117 cents and 6,840 cents support levels into play.
Summary
Truworths International Limited’s (JSE: TRU) recent share price performance has been largely driven by the company’s strong sales growth in the UK. However, the company’s South African business remains under pressure due to weak consumer spending.
Technically, the stock is currently trading in an ascending channel pattern. A break above the 50-SMA could signal a continuation of the bullish trend, while a break below could lead to a pullback towards the 7,409 cents support level.
Sources: TradingView, MoneyWeb, Truworths International Limited, PR Newswire, Seeking Alpha, BusinessLive.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.
