South Africa 40 Cash Index price moves back into a consolidation
Traders who have been short might consider using a time stop to exit at current levels.
South Africa 40 Cash Index
The bearish price reversal (circled red) at resistance yielded a modest decline for the South Africa 40 Cash Index, although has failed to reach the 66250-support target. The price is currently consolidating within the 66250 to 68515 range.
Traders who have been short might consider using a time stop to exit at current levels whilst waiting for a better opportunity to present itself.
Long entry might be considered on either a bullish reversal close to the 66250 or 65040 support level, or alternatively on a break (close) above the 68515-resistance level.
Short entry might be considered on a bearish reversal of the 68515-resistance level.
Should one of the above scenarios manifest we will update accordingly with 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 this week.
South Africa 40 Cash Index (previous)
The longer-term trend for the South Africa 40 Index remains sideways for the time being. This continues to suggest a range trading price environment for the index. As such, we continue to look for opportunities to trade between support and resistance levels within this broader sideways consolidation.
The South Africa 40 Cash Index has now formed a bearish reversal off the 68515-resistance level. The bearish price reversal is accompanied by an overbought signal on the stochastic oscillator.
The reversal and overbought signal suggest a short-term decline to follow, with 66250 the initial support target. Traders who are short into the move might consider using a close above the reversal high and resistance at 68515 as a stop loss indication.
Key data
This evening (31 January 2024, 9pm) will see traders keeping an eye on the US Federal Reserve meeting. Expectations are for no change in lending rates, however commentary from Fed Officials will be closely monitored for clues to towards the pace of future monetary easing going forward.
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