Bidcorp Group (BID ZA)

Bidcorp is a market-leading food service product distributor across several geographies including the United Kingdom, Europe, Middle East, South America, the Asia-Pacific region, and South Africa.

- Analysts: Peet Serfontein, Pritu Makan

The company's business units operate across the food and ingredient manufacturing sectors. The strategy is to grow organically in existing regions, and acquisitively in new ones. It is financially strong, with relatively low levels of gearing and a robust business model with solid diversification and defensive characteristics.

Technically, the combination of a sustained bounce off the lower one standard deviation band (see the insert on the main chart), ongoing support from the broader upward trend, and signs of renewed buying interest makes the share an interesting candidate for a long position-supported by bullish momentum based on a price swing analysis.

The price is using its 200-day simple moving average (SMA) as major support, suggesting that investors continue to view the share as fundamentally strong and that the longer-term trend remains intact. However, downside momentum, according to the Moving Average Convergence Divergence (MACD) histogram indicator, is a concern.

We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R492.

Technical analysis