South Africa 40 Cash Index price forecast: intraday reversal requires confirmation
Marked with the black arrow we do see an intraday price reversal (hammer) from oversold conditions.
South Africa 40 Cash Index
The South Africa 40 Cash Index’s downside break of the 66450 level, saw a prompt move to support at 65100. This level has now been broken as well but moved the index into oversold territory.
Marked with the black arrow we do see an intraday price reversal (hammer) from oversold conditions. This does suggest that a bullish reversal could be forming. Confirmation of the reversal would be considered on a positive close above the 65100-resistance level. In this scenario, a close below the low at 63910 might be used as a stop loss consideration, while searching for a retest of the 66450-resistance level.
Should the bullish reversal not confirm and instead we see a lower close on the index price today, 63400 becomes the downside support target from the move. Our preference in this scenario would be to wait out weakness and see how the index price handles the 63400-support level. A break of this level would require a reassessment of the longer-term trend (currently considered sideways).
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 24th of October).
South Africa 40 Cash Index (previous)
The breakout scenario highlighted in our previous note resulted in a quick move through the 67580-resistance target. Circled red we see the move higher found a near term top in the form of a bearish price reversal (bearish engulfing pattern).
The price now trades within a near term range between levels 66450 (support) and 67580 (resistance).
We are currently waiting for a new directional confirmation in the form of a break of either support or resistance of this range. When one of these breakout scenarios manifest, we will update guidance accordingly with suggested stops and targets.
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 (Tuesday 17 October) currently estimated at 62.8 points.
Upcoming economic data
Date |
Time |
Region |
Event |
Previous |
18 October 2023 |
10:00am |
ZAR |
CPI y/y |
4.80% |
18 October 2023 |
4:00am |
CNY |
Industrial Production y/y |
4.50% |
18 October 2023 |
8:00am |
GBP |
CPI y/y |
6.70% |
19 October 2023 |
2:30pm |
USD |
Unemployment Claims |
209K |
19 October 2023 |
6:00pm |
USD |
Fed Chair Powell Speaks |
|
20 October 2023 |
8:00am |
GBP |
Retail Sales m/m |
0.40% |
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