South Africa 40 Cash Index price overbought at all time highs
The South Africa 40 Cash Index has extended gains to test all time high territory since forming the inverse head and shoulders reversal pattern.
South Africa 40 Cash Index
The South Africa 40 Cash Index has extended gains to test all time high territory since forming the inverse head and shoulders reversal pattern. Traders who did not exit at the initial target might consider doing so at current levels.
The index is still considered to be in a broad range trading environment, and as such we can consider trades in either direction, depending on how the price manages key levels.
Currently the South Africa 40 Cash Index is forming a bearish price reversal from overbought territory and at the 80075 resistance level. Should the reversal complete with a sharp negative close and confirm with a further move below the 78775 level, traders might consider short positions with 76825 the initial target. In this scenario, a close above the 80075 level might be used as a stop loss consideration.
To reestablish the long term uptrend the price would instead need to produce a clear break and close above the high at 80075. In this scenario, traders might then start to look to buy into pullbacks from each new high with a long bias to trades reconsidered.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying on Tuesday the 11th of February 2025.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index completed the inverse head and shoulders reversal pattern highlighted in our previous note. The price has since moved towards the initial resistance target at 78775.
The index has now returned to overbought territory and as such traders might look to lock in profits as we approach the 78775-resistance target.
The recent breach of the 200-day simple moving average (blue line) questions the state of the longer-term trend, previously considered up. For now, until such time as we can take out the all-time high we consider a longer term sideways rangebound environment. This suggests that traders might continue to look for either long or short positions depending on how key price levels are handled.
Should a new setup in either direction present itself we will update guidance 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 on Tuesday the 4th of February 2025.
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