South Africa 40 Cash Index price breaks long term uptrend
Traders are reminded that US Indices can now be traded in rands from a local account
South Africa 40 Cash Index
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.
Key data
The local index appears to be following US equity markets lower following last week’s better than expected jobs data which suggested that borrowing costs in the world’s largest economy could stay higher for longer than originally anticipated.
As such US data will be key for traders to watch in terms of providing short term directional guidance.
On Tuesday we await US Producer Price Index (PPI) and Core PPI data at 3.30pm (SA time).
On Wednesday we await Consumer Price Index (CPI) and Core CPI data at 3.30pm (SA time).
In additions to US PPI and CPI inflation data out this week, traders will also want to keep an eye out for Retail and Core Retail sales data as well as Weekly Unemployment Claims data out on Thursday.
There is no high impact data scheduled for release locally this week.
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.
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