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South Africa 40 Cash Index price reversal fails

There is no dividend adjustment for the index expected this week

Source: Getty Images

South Africa 40 Cash Index

Source: IG charts
Source: IG charts

The bullish price reversal (circled blue) from oversold territory, highlighted in our previous note (below), for the South Africa 40 Cash Index has failed. This is noted by the price of the index having closed below the guided stop level at 70370.

While the short-term price correction has instead continued, the trend bias is still considered up as the 20MA (red) trades above the 50MA (green) which in turn trades above the 200MA (blue). The index now also trades back in oversold territory.

Trend followers might continue to wait out weakness and look for a bullish price reversal close to a lower level of support before finding long entry. The next levels of support are considered at 69400 and 67870 respectively.

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 10th of June 2024.

Key data this week

Date

Time

Region

Event

Previous

11 June 2024

1:00pm

ZAR

Manufacturing Production m/m

-2.2%

11 June 2024

1:00pm

ZAR

Manufacturing Production y/y

-6.4%

12 June 2024

8:00am

GBP

GDP m/m

0.4%

12 June 2024

2:30pm

USD

Core CPI m/m

0.3%

12 June 2024

2:30pm

USD

CPI m/m

0.3%

12 June 2024

2:30pm

USD

CPI y/y

3.4%

12 June 2024

8:00pm

USD

Federal Funds Rate

5.50%

12 June 2024

8:00pm

USD

FOMC Economic Projections

12 June 2024

8:00pm

USD

FOMC Statement

12 June 2024

8:30pm

USD

FOMC Press Conference

13 June 2024

11:30am

ZAR

Gold Production y/y

-4.5%

13 June 2024

11:30am

ZAR

Mining Production m/m

-5%

13 June 2024

11:30am

ZAR

Mining Production y/y

-5.8%

13 June 2024

2:30pm

USD

Core PPI m/m

0.5%

13 June 2024

2:30pm

USD

PPI m/m

0.5%

13 June 2024

2:30pm

USD

Unemployment Claims

14 June 2024

Tentative

JPY

BOJ Policy Rate

<0.10%

14 June 2024

Tentative

JPY

Monetary Policy Statement

14 June 2024

Tentative

JPY

BOJ Press Conference

14 June 2024

4:00pm

USD

Prelim UoM Consumer Sentiment

69.1

14 June 2024

Tentative

USD

Treasury Currency Report

South Africa 40 Cash Index (Previous)

Source: IG charts
Source: IG charts

The South Africa 40 Cash Index has now confirmed a bullish price reversal off the 70850-support level. The price reversal is further supported by a move out of oversold territory.

In turn, a short-term resumption of the longer-term uptrend is considered, with 72185 the initial upside resistance target. A close below the reversal low at 70370 might be used as a stop loss consideration.

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 3rd of June 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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