South Africa 40 Cash Index price forecast: resistance target tested
Range traders might consider exiting their positions whilst waiting for a new trading opportunity
South Africa 40 Cash Index
The bullish reversal scenario from our previous note (below) was affirmed (circled black), with the price now having moved swiftly to the 67430-resistance target. The reversal reaffirms the 66250 as a notable short term support level.
Range traders might consider exiting their positions whilst waiting for a new trading opportunity to manifest.
For new long positions, traders might hope to see range breakout (confirmed with a close) above the 67430 level. In this scenario, 68515 becomes the initial resistance target from the move, while a close below 66900 might be used as a stop loss consideration.
A short trade scenario might be considered if the 67430-resistance level is not broken (with a close above) and we instead see a bearish reversal off this level. A bearish reversal would be considered if the next candle closes within the lower half of the current green candle. If this scenario presents itself, we will update accordingly with stop and limit suggestions.
South Africa 40 Cash Index (previous / Technical Tuesday)
The South Africa 40 Cash Index’s bullish reversal off support, and from oversold territory, has lost momentum and appears to be failing at present. The index has made a short term high at 67430, falling short of the 68515 target.
A new short-term range is assumed between levels 66250 (support) and 67430 (resistance).
For a new long entry opportunity, traders might hope to see another bullish reversal off the 66250 level. In this scenario 67430 would become the initial resistance target, while a close below the 66250 level or reversal low might be used as a stop loss consideration.
For new short positions, traders might prefer to instead see a close below the 66250 level, before targeting a move towards the next level of support at 65040. In this scenario, a close above the one day high might be used as a stop loss consideration.
Should one of the above scenarios or more favourable setup manifest we will update guidance accordingly.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week.
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.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
