South Africa 40 Cash Index price consolidates after rebound
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 45.4 points
South Africa 40 Cash Index
The South Africa 40 Cash Index produced the bullish price reversal scenario from our previous note (circled blue). The reversal off the 72185 level has resulted in a prompt move back towards the 74420 level. This level is now acting as near-term resistance.
The price of the index is now consolidating in a tight range between levels 73395 and 74420 in the near term, while the long-term trend remains up.
The long-term uptrend continues to suggest keeping a long bias trades.
For new long positions, traders may look for a close above resistance at 74420, before targeting a move to the high at 75830. In this scenario, a close below 73395 might be used as a stop loss consideration.
Should the price instead move to close below 73395. Traders might wait for weakness to play out then looking for a bullish price reversal off either the 72185 or 70850 support level for long entry.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 45.4 points on Tuesday the 13th of August 2024.
South Africa 40 Cash Index - previous
The South Africa 40 Cash Index produced a false break and bearish price reversal (circled red) around the 75350 high. The long-term trend remains up for the index, despite the near-term correction thereof currently underway.
Our preference remains buying into each pullback from a near term high. However, we now wait for evidence that the pullback is drawing to an end. The price action has not yet provided such evidence.
We are currently assessing the depth of the near-term pullback. A close below 72185 would suggest 70850 as the next support target. Traders respecting the longer-term uptrend might wait to see a bullish price reversal at either the 72185 or 70850 support levels for new long positions to be considered. In this scenario as close below the reversal low might be used as a stop loss consideration while looking for a move back towards the recent high.
Should this or another trading scenario present itself we will update guidance accordingly with definitive targets and failure levels.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying for the week commencing 5th of August 2024.
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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