South Africa 40 Cash Index
The South Africa 40 Cash Index completed the inverse head and shoulders reversal pattern highlighted in our previous note. The price has since moved towards the initial resistance target of 78775.
The index has now returned to overbought territory and as such traders might look to lock in profits as we approach the 78775-resistance target.
The recent breach of the 200-day simple moving average (blue line) questions the state of the longer-term trend, previously considered up. For now, until such time as we can take out the all-time high, we consider a longer-term sideways rangebound environment. This suggests that traders might continue to look for either long or short positions depending on how key price levels are handled.
Should a new setup in either direction 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 4th of February 2025.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index produced an upside break of the 76640 level last week which has subsequently failed. As such we have revised the 76640 resistance level to 76825 as it has proved short-term relevance.
The price action below the 76825 level resembles an inverse head and shoulder pattern, although this not yet completed or confirmed.
For the pattern to confirm we would like to see a strong close above the 76825 neckline before targeting a move back towards the 78775 level. In this scenario, a close below the 75760 level might be used as a stop-loss consideration.
For new short positions, traders might instead look for a close below the 75760 level. In this scenario, 73715 becomes the initial support target from the move, while a close above the 76825 level might be used as a stop-loss consideration.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying on Tuesday the 28th of January 2025