By Peet Serfontein & Motheo Tlhagale
African Rainbow Minerals is a leading South African diversified mining company with operations in coal, copper, gold, platinum group metals (PGMs), nickel, and ferrous minerals. It holds a 50% stake in Assmang Limited, which produces iron ore, manganese, and chrome, and it also operates key platinum mines like Modikwa and Two Rivers through joint ventures. Through ARM Exploration, the company pursues mineral opportunities across sub-Saharan Africa.
Gold exposure through its 15% interest in Harmony Gold adds volatility but is currently supportive. ARM is also strategically positioning itself for future growth through increased exposure to future-facing commodities like copper via its co-developed project in Namibia with Vale SA and investments in Surge Copper Corp.
Technically, the stock is developing a falling wedge pattern (see the black converging trendlines on the main chart), a formation that typically emerges after a period of decline, where lower highs and lower lows begin to converge, indicating that selling pressure is weakening. With price now testing the upper boundary of the wedge and momentum improving, this signals potential for an upside breakout and makes the share an interesting candidate for a long position.
The Wyckoff accumulation phase supports a bullish outlook for the share, as it reflects renewed buying interest and diminishing supply (see the insert on the main chart). This phase typically follows a decline, with stabilising volumes and reduced volatility indicating a shift from weak to strong hands. As demand begins to outweigh supply, a breakout above resistance often confirms the start of a new upward trend.
The price action remains above both its 200-day and 200-month simple moving averages (SMAs). This alignment of medium- and long-term trends confirms a well-established uptrend, reflecting steady institutional support and positive market sentiment.
Fading downside price momentum, as shown by the rising Moving Average Convergence Divergence (MACD) histogram on the weekly chart, also supports the trade idea. This suggests weakening bearish momentum and reduced selling pressure.
| Share Information | |
|---|---|
| Share Code | ARI |
| Industry | Materials |
| Market Capital (ZAR) | 39.01 billion |
| One Year Total Return | 5.04% |
| Return Year-to-Date | 32.29% |
| Current Price (ZAR) | 186.91 |
| 52 Week High (ZAR) | 203.49 |
| 52 Week Low (ZAR) | 115.07 |
| Financial Year End | June |
| The share has recovered from a recent trough with several indicators pointing to further upside potential. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | Y27E | FY28E | |
| Headline Earnings per Share (ZAR) | 13.79 | 17.64 | 20.88 | 24.30 |
| Growth (%) | 27.94 | 18.35 | 16.35 | |
| Dividend Per Share (ZAR) | 10.50 | 9.89 | 10.01 | 11.34 |
| Growth (%) | -5.84 | 1.27 | 13.27 | |
| Forward PE (times) | 10.59 | 8.95 | 7.69 | |
| Forward Dividend Yield (%) | 5.29 | 5.36 | 6.07 | |
| While the company continues to face challenges in the short term, underscored by weak FY25 results, medium-term growth prospects remain robust. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and Position | VOD SA - Buy (Continue to hold) |
ANH SA - Buy (Continue to hold) |
INL SA - Buy - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 13290 | 103156 | 13401 |
| Current Price | 13500 | 102776 | 13099 |
| Movement | +1.6% | -0.4% | -2.3% |
| Comment | Low volatility suggests market stability and possible accumulation, while price action stays above the 200-day SMA. Fading downside momentum supports maintaining a bullish stance. Profit target remains R157.00 with stop-loss at R123.00 and trailing stop at R126.00. | TPrice action remains within the upward-sloping linear regression channel but below the 200-day SMA, framing this as a counter-trend trade. Fading downside momentum supports the setup. Profit target is R1 255.00, with both initial and trailing stop-loss at R942.00. | An upward-tilted broadening top pattern remains of interest, with price action holding above the 200-day SMA. Emerging downside momentum is a concern for the trade. Profit target stays at R150.75, with an initial stop-loss at R127.00 and trailing stop at R127.30. |
| Time to exit | 11 February 2026 | 17 February 2026 | 31 December 2025 |
| Share Name and Position | SHP SA - Buy (Continue to hold) |
CFR SA - Buy (Continue to hold) |
DCP SA - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 27833 | 298000 | 3260 |
| Current Price | 27963 | 338000 | 3294 |
| Movement | +0.5% | +13.4% | +1.0% |
| Comment | Price action within a well-defined inclining channel pattern remains of interest as it continues to test the 200-day SMA. Fading upside momentum is a concern for the trade. Profit target is maintained at R312.00, with an initial stop-loss at R265.00 and trailing stop at R266.00. | The emergence of a potential Wave one formation under the Elliott Wave theory remains of interest, with the price action now above the 200-day SMA. Strong upside momentum supports the trade. Profit target is R3 517.00, with an initial stop-loss at R2 765.00 and trailing stop at R3 165.00. | Price action forming a symmetrical triangle pattern remains of interest as it continues to test the 200-day SMA. Fading upside momentum poses a concern for the trade. Profit target is maintained at R37.00, with an initial stop-loss at R31.00 and trailing stop at R31.30. |
| Time to exit | 9 December 2025 | 28 April 2026 | 29 October 2025 |
| Share Name and Position | TBS SA - Buy (Continue to hold) |
SBK SA - Buy (Continue to hold) |
GRT SA - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 30450 | 23357 | 1322 |
| Current Price | 31674 | 24649 | 1500 |
| Movement | +4.0% | +5.5% | +13.5% |
| Comment | Strong price action supported by a rising Volume Price Trend (VPT) and sustained accumulation highlights continued upside potential after consolidation. The price remains above the 200-day SMA, while fading downside momentum supports the trade. Profit target is R345.00, with stop-loss at R288.00 and trailing stop at R300.00. | Price action holding above key support remains of interest, with levels sustained above the 200-day SMA. Renewed upside momentum supports the trade strategy. Profit target is maintained at R261.00, with an initial stop-loss at R223.00 and trailing stop at R236.00. | A gross dividend of R0.633 will trade ex-dividend on 15 October 2025. Price action remains near the upper range of its price distribution and above the 200-day SMA. However, fading upside momentum poses concern. Profit target is R16.00, with stop-loss at R12.00 and trailing stop at R13.40. |
| Time to exit | 27 October 2025 | 19 January 2026 | 17 November 2025 |
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