South Africa 40 Cash Index price moves into new high and overbought territory
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 45.4 points
South Africa 40 Cash Index
The South Africa 40 Cash Index produced the upside breakout scenario presented in our previous note, marked by the close above the 74420 level. The price of the index has since taken out the high at 75830.
As we move into new high territory, we are using overhead trend line resistance to project a further upside resistance target at 78500.
The move higher has however moved the South Africa 40 into overbought territory. Traders who are long might consider exiting their positions at current levels. For new long positions, traders might prefer to wait for the first pullback from new high territory for entry. These positions might be preferred closer to one of the labelled support levels. We are not looking to pick highs and trade against the prevailing uptrend.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 61.3 points on Tuesday the 20th of August 2024.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index produced the bullish price reversal scenario from our previous note (circled blue). The reversal off the 72185 level has resulted in a prompt move back towards the 74420 level. This level is now acting as near term resistance.
The price of the index is now consolidating in a tight range between levels 73395 and 74420 in the near term, while the long term trend remains up.
The long term uptrend continues to suggest keeping a long bias trades.
For new long positions, traders may look for a close above resistance at 74420, before targeting a move to the high at 75830. In this scenario, a close below 73395 might be used as a stop loss consideration.
Should the price instead move to close below 73395. Traders might wait for weakness to play out then looking for a bullish price reversal off either the 72185 or 70850 support level for long entry.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 45.4 points on Tuesday the 13th of August 2024.
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.
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