A quick look at the Truworths International (JSE:TRU) longish term chart tells an interesting story.
Below price action since the mid 2000's shows an attempted triple top in late-2012, early 2016 and early 2018. At first glance it looks like just another chart.
The 2016 top never quite made it to the 2012 high and the 2018 top ended up somewhere in the middle. From there its all downhill into March 2022, start of lockdown.
An interesting phenomenon happens from August-September 2020, in that the price action reverses.
Below is a price chart from 2005 to September 2020, but in reverse.
The next chart starts in late 2020 and is a 30 month version of the preceding 15 years (in reverse).
Note the triple tops matching in height. Slopes, valleys and peaks match the reverse-chart closely, with few exceptions.
So if Truworths is reversing, expect an immediate bear market rally from the current R51 area to R65 which corresponds to the middle of the 3 tops.
After that the real bear resumes and continues into mid-2024 and will make people hate the share. A short rally will happen in mid-2024 whereafter the bear takes us into mid 2025.
In mid-2024 and, especially, mid-2025 expect many reasons and media articles as to why Truworths had been making bad decisions. They will blame the new CEO. They will blame the old CEO, the fashion, the debt incurred building the new distribution center, the purchase of Plein park, load-shedding, riots, something about China and a host of other reasons analysts can come up with. The analyst with the best reason(s) will get the most brownie points.
This list will be long and heavy. Nobody will want the share.
But Truworths will survive.
For now, buy in this area with a SELL at R64. If the share makes it close to R67, short it.
Should be an interesting watch.