South Africa 40 Cash Index confirms rangebound price environment
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of 19,5 points on Tuesday the 21st of January 2025
South Africa 40 Cash Index
After a bullish price reversal from oversold territory, the South Africa 40 Cash Index has rallied back above the 200-day simple moving average (blue line) (200MA) and the 75760-resistance level. The move has put the index back into overbought territory.
The move above the 200MA, after the recent move below this indicator, confirms our perspective that the index has moved into a broad range bound trading environment. As such we continue to look for trading opportunities in either direction between key levels of this broad range.
For new long positions traders might look for a break above the 76640 level, before targeting a move towards initial resistance at 78775. 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 bearish price reversal from overbought territory confirmed with a close below the 75760 level. In this scenario, 73715 becomes the initial support target from the move, while a close above the 76640 level might be used as a stop loss consideration.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of 19,5 points on Tuesday the 21st of January 2025.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index is now trading below the 200-day simple moving average (MA) (blue line), while the 20MA is now also trading below the 50MA. The lay of the moving averages suggests that the long-term uptrend has now been broken (price < 200MA) while the short to medium term trend is now considered down (10MA < 50MA).
Traders will recognise that the long-term uptrend is no longer in place and that the index has moved into a range trading environment may now be prevalent. This suggests trading in either direction relative to how the price manoeuvres through and between key levels.
In the short to medium term, we have seen break below the 75760 level, suggesting 71990 to be a near term target from the move.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of 18,5 points on Tuesday the 14th of January 2025.
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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