South Africa 40 Cash Index price forecast: limit target realised
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week
South Africa 40 Cash Index
The South Africa 40 Cash Index has now rallied to the previously guided resistance target at 68515. In doing so, the index has now moved into overbought territory.
Range traders who have been long from the reversal at support (circled green), might now look to be exiting their positions whilst waiting for the next opportunity to present itself.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week.
Key Data points
Local trade balance data is perhaps the most relevant domestic news point for traders to watch out for this week. On the global front, we await the Bank of England’s (BOE) and Federal Reserve Bank’s rates announcements on Wednesday as well as US Non-Farm Employment data on Friday.
South Africa 40 Cash Index (previous)
Since our previous note the South Africa 40 Cash Index broke the 66250-support level before forming a bullish reversal off the 65040 level.
The bullish price reversal has been strong enough to produce a close back above the 66250 level. This move has also been accompanied by a move out of oversold territory. The current price action suggests the move higher to be continuing with 68515 the next upside resistance target. Traders who are long might consider using a close below the low at 65765 as a stop loss indication.
The relatively tight stop loss considers a news heavy week in which markets still await US Advance GDP, PCE Inflation, local CPI inflation, the ECB rates decision as well as the SARB rates decision.
Large cash adjustment expected
Traders will also want to note that the South Africa 40 Cash Index will adjust for a dividend in the underlying index on Tuesday the 23rd of January, currently estimated to be around 219.7 points.
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