South Africa 40 Cash Index price overbought in uptrend
Trend followers will look to keep a long bias to trades waiting for the first correction of the move higher for long entry.
South Africa 40 Cash Index
The South Africa 40 Cash Index has extended gains even further, reaching the 73250-resistance level, around which it is hovering now. The price has offered little in the way of a pullback for new long entry into the prevailing uptrend.
The index remains in overbought territory and guidance remains the same as before, in terms of trend followers will look to keep a long bias to trades waiting for the first correction of the move higher for long entry. Circled red we do have a bearish price reversal forming although not yet complete. An initial support level where new longs may be considered is around the 72185 level.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying for the week commencing 20 May 2024.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index’s upside break above the 70850 level has gained momentum and is moving towards the next resistance target at 73250. This move higher now suggests that we are moving out of a rangebound price environment and into a new uptrend.
The index continues to trade deep within overbought territory. Trend followers might now prefer to keep a long bias to trades, although waiting for the first pullback from this move higher and from overbought territory might be preferable for long entry.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying. The adjustment is currently estimated at 40.2 points and set for the 14th of May 2024.
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