South Africa 40 Cash Index
The suggestion of exiting long positions on the South Africa 40 Cash Index around the all-time high in our previous note, appears to have been premature. The index has since produced an upside break of the previous high of 80075. The upside breakout now suggests that overhead trend line resistance at 84750 could be a longer term target for the South Africa 40 Cash Index.
The move reaffirms the uptrend for the index, suggesting that trend followers would again look to keep a long bias to trades.
For new positions, we are now waiting for the first pullback from the new high territory, preferably with the pullback ending with a bullish price reversal closer to one of the labeled support levels on our chart.
Should this scenario present itself we will update guidance accordingly with targets and failure levels.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying on Tuesday the 18th of February 2025.
South Africa 40 Cash Index (Previous)
The South Africa 40 Cash Index has extended gains to test all-time high territory since forming the inverse head and shoulders reversal pattern. Traders who did not exist at the initial target might consider doing so at current levels.
The index is still considered to be in a broad-range trading environment, and as such we can consider trades in either direction, depending on how the price manages key levels.
Currently, the South Africa 40 Cash Index is forming a bearish price reversal from overbought territory and at the 80075 resistance level. Should the reversal complete with a sharp negative close, and confirm with a further move below the 78775 level, traders might consider short positions with 76825 as the initial target. In this scenario, a close above the 80075 level might be used as a stop-loss consideration.
To reestablish the long-term uptrend the price would instead need to produce a clear break and close above the high at 80075. In this scenario, traders might then start to look to buy into pullbacks from each new high with a long bias to trades reconsidered.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying on Tuesday the 11th of February 2025.