South Africa 40 Cash Index bullish continuation and dividend FOMC reminder
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In line with the bullish momentum highlighted in yesterday’s guidance we are seeing another bullish continuation pattern forming (circled blue). The price has moved just three points short of our initial upside target at 64750.
Traders who are long might look to tighten their stop loss to a close below the 63900 low, whilst targeting further gains towards the 65600 level.
The South Africa 40 Cash Index remains in a broad range trading environment over the medium term, between levels 58000 (support) and 65600 (resistance). In lieu of this we are looking to exit close to the 65600 resistance level or on a trailed stop as we move towards this level.
Cash adjustment
Traders of the South Africa 40 Cash Index will want to note that the index is set to adjust (on Tuesday 16 August) for a relatively large dividend in the underlying, currently estimated at 245.4 points. Our current stop loss guidance takes this event into account.
Fed Meeting minutes
Traders will also need to be mindful of the Federal Open Market Committee (FOMC) meeting minutes scheduled for release on Wednesday evening. The FOMC minutes guide towards the outlook of US monetary policy and has the potential to move global markets and in turn our local bourse.
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