ZZD - Long Idea

The stock has printed an interesting, inverted head and shoulders and its currently rising above the upsloping 20/50 ema's.

While bulls hold it above R10.90 , the bull flag is likely to play out but for a longer term horizon, a stop below R10 would be preferable. The pattern targets R16 eventually.

The inverse head and shoulders is a technical chart pattern that signals a potential trend reversal from a downward trend to an upward trend in the price of a security or asset 12. It is also called a “head and shoulders bottom” 1. The pattern resembles the shape of a person’s head and two shoulders in an inverted position, with three consistent lows and peaks 12. The pattern is identified when the price action of a security meets the following characteristics 1:

The price falls to a trough and then rises.
The price falls below the former trough and then rises again.
Finally, the price falls again but not as far as the second trough.
Once the final trough is made, the price heads upward, toward the resistance found near the top of the previous troughs 1. Investors typically enter into a long position when the price rises above the resistance of the neckline 1. A suitable profit target can be ascertained by measuring the distance between the bottom of the head and the pattern’s neckline and using that same distance to project how far the price may move in the direction of the breakout.