South Africa 40 Cash Index price breakout testing failure level
A close below 66900 level would confirm the initial breakout to have failed
South Africa 40 Cash Index
The South Africa 40 Cash confirmed an upside break of the 67430 level, although is currently pulling back and testing the previously guided stop level at 66900. A close below this level would confirm the initial breakout to have failed and suggest a move back towards the 66250-support level.
Traders looking for new long positions might hope to see a bullish price reversal above or off the 66900 level to end the current pullback or alternatively on a bullish reversal closer to the 66250 level. In both these scenarios, a close below the reversal low might be used as a stop loss indication, while in search of a move towards 68515.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week.
South Africa 40 Cash Index (previous)
The bullish reversal scenario from our previous note (below) was affirmed (circled black), with the price now having moved swiftly to the 67430-resistance target. The reversal reaffirms the 66250 as a notable short term support level.
Range traders might consider exiting their positions whilst waiting for a new trading opportunity to manifest.
For new long positions, traders might hope to see range breakout (confirmed with a close) above the 67430 level. In this scenario, 68515 becomes the initial resistance target from the move, while a close below 66900 might be used as a stop loss consideration.
A short trade scenario might be considered if the 67430-resistance level is not broken (with a close above) and we instead see a bearish reversal off this level. A bearish reversal would be considered if the next candle closes within the lower half of the current green candle. If this scenario presents itself, we will update accordingly with stop and limit suggestions.
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