JSE top 40: Best 10 shares to watch for Q4 2020
After the close of the 3rd Quarter of 2020, we look at the best 10 largest companies on the JSE Top40 Index – in terms of weighting on the index. Beyond that, we also look at their relative performance this year.
The top 10 largest shares to watch for Q2 2020:
The top 10 JSE companies, in terms of weightings in the top 40 index account for roughly 70% of the index. The below pie chart is a visual representation of the weightings of these companies as of the 30th of September 2020:
Top 10 large cap shares on the JSE 40 by Q2 Performance
The below table highlights South Africa’s Top 10 companies in terms of the market cap weighted JSE Top40 Index, highlighting their 2020 Performance, Broker Ratings, long term price targets and IG client sentiment views.
| Name/Ticker | Share price performance (YTD) | Consesus Broker rating | Long-term price target (avg) | % IG Clients sintiment-long | % IG Clients sentiment-short |
| Naspers (NPN) | 32.73% | Strong Buy | R4700 | 88% | 12% |
| BHP Group Plc (BHP) | 7.19% | Buy | R400.24 | 85% | 15% |
| Richemont (CFR) | 1.98% | Hold | R102.75 | 60% | 40% |
| Anglo American Plc (AGL) | 1.4% | Buy | R465.66 | 73% | 17% |
| Firstrand Ltd (FSR) | -35.03 | Buy | R49 | 84% | 16% |
| Anglogold Ashanti Ltd (ANG) | 37.03% | Hold | R560.12 | 91% | 9% |
| Gold Fields Ltd (GFI) | 111.22% | Buy | R228.49 | 81% | 19% |
| Mondi Plc (MNP) | 9.23% | Buy | 331.33 | 81% | 19% |
| Prosus NV (PRX) | 43.94% | Buy | N/A | 90% | 10% |
| British American Tobacco (BTI) | -1.86% | Buy | R740 | 83% | 17% |
The share price performance figures show the respective performances of these shares from the close of business on 31 December 2019 up to the 8th of October 2020. The broker rating and long-term target prices are sourced from Thomson Reuters data.
British American Tobacco (*) although not tradeable as a CFD on the domestic (South African) account is offered to traders and investors on offshore international trading accounts. The client sentiment and broker rating data for this share is based on the UK listing of British American Tobacco.
Trading view of the top 10 shares on the JSE Top 40 Index
Naspers
The share price of Naspers Ltd continues to trade within a broad range that has been in place since May this year. The price is currently trading in the middle of this range. The trend which preceded the current range trading environment was up. With this in mind, traders of Naspers may prefer to keep a long bias to trades on the share.
In turn range traders might prefer to see a bullish price reversal closer to the 2810 support level for long entry, targeting a move back towards at least the mid-range point for an exit, while using a close below the reversal low as a stop loss consideration for the trade.
BHP Billiton
The long term trend for the BHP Group PLC (SA) Group remains up as the price continues to trade above the 200 day simple moving average. In the shorter term the price action is in more of a range bound environment with support considered at 34610 and resistance considered at the 38220 level. Provided the price remains above the 200MA we prefer a long bias to trades on the miner with 38220 the initial upside price target.
Cie Financiere Richemont
The dual-listed Swiss luxury goods business Cie Financiere Richemont SA (CH) has formed a bullish price reversal off support of the 200 day simple moving average. The price reversal is circled red and is considered a bullish harami in technical analysis terms. The price reversal suggests 11700 as the next upside target from the move. Traders who are long might consider using a close below the reversal low or 200MA as a stop loss level for the trade.
Anglo American
Anglo American PLC (SA) like BHP trades in a broad range in the near term, while the longer term trend remains up. Range traders might prefer keeping a long bias to trades, waiting for a bullish reversal nearer to the support of this range (38800) for long entry, targeting a move back towards the 42500 resistance level. In this scenario a close below the 200 day simple moving average may be used as a stop loss consideration for the trade.
Firstrand
The share price of FirstRand Ltd continues to trade in a broad range between levels 3565 (support) and 4270 (resistance). The price reversal whilst in overbought territory does suggest that a move back towards support is possible. The bearish reversal from overbought territory would be deemed to have failed on a confirmed close above the 4270 level. Should this instead occur, it would constitute and upside breakout and target further gains with 4640 as the next upside resistance target from the move.
AngloGold Ashanti
AngloGold Ashanti Ltd (SA) has seen its share price drifting lower since August this year, although the longer term trend is still considered up. The shorter term move lower now sees the share price testing support of the 200 day simple moving average (the gauge of long term trend). A move below the 200MA could suggest that the long term uptrend is no longer in place, with the next level of support considered at 35000.
However while the price remains above the 200MA (blue line) traders might hope for the share price to instead close firmly above the red trend line on the chart above. This would suggest that the short term downtrend is now broken and possibly aligning with the longer term uptrend still in place. In this scenario, 50850 would become the initial upside target favoured from the move.
Goldfields Ltd
Gold Fields Ltd - ADR has seen its share price starting to correct since August this year. The correction has taken the form of a slow downward channel. Traders looking for a long positioning on the share might hope for a bullish price reversal before the 200 day simple moving average on our chart (blue line) before targeting renewed gains towards channel resistance once again. However should the share price not produce a bullish price reversal and instead move to close below the 200MA, the next support target is considered at 15640.
Mondi Ltd (SA)
Circled red we see that the MND-ZA share price has formed a bearish candlestick reversal while the company trades in overbought territory. The long term trend does however remain up, as denoted by the upward channel drawn on our chart. Traders might hope for a short term pullback from the reversal, back towards channel support at around 32760. It is around this level where traders might once again start to look for a long positioning on the share, targeting a longer term move back towards channel resistance.
Prosus
The share price of Prosus NV (NL) continues to trade within a broad range between the 148750 (support) and 175000 (resistance) levels. The trend which preceded the current range trading environment was up. With this in mind, traders of Prosus may prefer to keep a long bias to trades on the share.
In turn range traders might prefer to see a bullish price reversal closer to the 148750 support level for long entry, targeting a move back towards at least the mid-range point for an exit, while using a close below the reversal low as a stop loss consideration for the trade.
How to trade top 10 JSE performing stocks
If you want to trade any of the top 10 stocks we have discussed today, you can utilise IG’s CFD trading platform to speculate on the share price movements of the underlying asset – to buy (long) or sell (short) following these simple steps:
- Create an IG Trading Account or Open MyIG on your existing account
- Enter the company name or ticker in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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