Barloworld Ltd. (BAW), a seller of equipment to mining and construction companies, fell the most since Nov. 9 as a monthlong rally that followed a 53 percent rise in full-year income was snuffed out.
Shares in the Johannesburg-based company declined 3.4 percent at 82.79 rand. About 693,000 shares changed hands, or 88 percent of the three month daily average. The 29-member FTSE/JSE Africa Industrial Index was down about 0.7 percent.
“Barloworld was in an overbought space for a while,” Ferdi Heyneke, a trader at Afrifocus Securities (Pty) Ltd., said by phone today. “This paring wasn’t a surprise.” The stock’s relative strength index has been above 70, which to some technical analysts suggests a security is overbought and may be set for a reversal.
The stock reached 89.70 rand on Jan. 4, its highest level since May, following a 22 percent rally from Dec. 3. Barloworld reported record sales to mines amid a 53 percent rise in full- year net income to 1.6 billion rand ($180 million) in November. The FTSE/JSE Africa All Share Index hit the latest in a series of record highs on Jan. 9.
The equipment seller’s 30-day historical volatility, a measure of stock swings, increased to 30.35 from 27.91 yesterday. The FTSE/JSE Africa’s 30-day volatility measure was at 9.10 from 8.97 previously. A higher reading means an asset’s price can have bigger moves.
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