South Africa 40 Cash Index price forecast: forecast finding resistance in overbought conditions
Currently we see a bearish reversal forming off the 67580 level and from overbought territory
South Africa 40 Cash Index
The reversal highlighted in our previous note saw the South Africa 40 Cash Index rally though both the initial upside targets before finding resistance at the 67580 level.
Currently we see a bearish reversal forming off this level and from overbought territory. We are looking for a close below the 66450 level to confirm the reversal.
In this scenario, 65100 becomes the initial downside support target from the move, while a close above the 67580 level might be used as a stop loss consideration for the setup.
Small cash adjustment expected
Traders will note that the South Africa 40 Cash Index is expected to adjust for a dividend in the underlying this week (on Tuesday the 7th of November 2023), currently estimated at 10.3 points.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index did not give the bullish confirmation we were hoping for in our last note, but instead drifted lower to the next level of support at 63400.
We have however seen a bullish price reversal (circled red) off this level. The long green candle suggests some momentum to the move. Traders might target a move to initial resistance at 65100. While using a close below the 63400 level as a stop loss indication for the trade. For more meaningful gains we would like to see a close above the 65100 to potentially unlock a further move towards the 66450 level.
No cash adjustment expected
Traders will note that the South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week (Tuesday 31st of October).
Key data
Trades will want to note key data in the form of Wednesday evenings Federal Reserve, and Thursday afternoon’s Bank of England policy meetings, which could impact short term market direction.
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