Shoprite Holdings (SHP). Fundamental Valuation: At 23x Earnings, It's Expensive, But Not Excessive. Considering the quality of the business/management and the fact that it's continuing the grow it's market share, the share deserves it's premium fundamental rating. That being said, the technical reward-to-risk has become less and less appealing for the short term traders. I previously highlighted the share at R203 when it traded at the lower boundary of the channel and well below it's 50/100-EMA range, which was the major technical signal that the share was excessively oversold at the time. We are now seeing the opposite with the price at the upper boundary of the channel and around 9% above the mid-point of the 50/100-EMA range i.e. the 75-day EMA. At at the time of writing (just before the close on Friday), the share is print a bearish engulfing candle, with a minor divergence on both the MACD and 14-Day RSI. Early days, but this might be shaping up for a short/sell.
