Since closing at an all-time high of R278.80 in June 2006, Sasol's share price has been declining steadily to close at R215 last Friday. While the proposed windfall tax certainly weighs on its share price, it is now oversold on both the daily and weekly chart.
Fundamentally, Sasol is trading at a PE of less than 10. With an increasing demand for its Gas-to-liquids and Coal-to-fuels technologies, its business prospects are excellent, and many years of growth are expected.
We believe it now offers a good buying opportunity for both traders and investors. The short-term price target is R250.
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