South Africa 40 Cash Index price reversal forming, and large dividend expected
The recent move to resistance (shaded grey) also resembles a bear flag formation, another negative indication which would be confirmed on a close below shaded support.
South Africa 40 Cash Index
The South Africa 40 Cash Index has respected the 69760-resistance level and could be forming a bearish reversal from this point.
The bearish reversal would be confirmed should the price close below the midpoint of the preceding green candle. The recent move to resistance (shaded grey) also resembles a bear flag formation, another negative indication which would be confirmed on a close below shaded support.
Should the bearish indications confirm, 68500 becomes the initial downside support target, and a close below this level would suggest 67400 as a possible further target from the move. In this scenario traders might consider using a close above the 69760-resistance level as a stop loss indication.
Large cash adjustment expected
While considering exits, traders will want to note that the South Africa 40 Cash Index is expected to adjust for a dividend in the underlying, currently expected to be around 141.7 points. The adjustment will take place late Tuesday afternoon (5 September 2023).
South Africa 40 Cash Index (previous)
The breakout criteria for the South Africa 40 Cash Index guided in our previous note (below) confirmed, with a price close above the 68500 level. Since the breakout we have seen a strong move towards the 69760-resistance target.
Traders who are long into the breakout might consider tightening stops to their respective entry points to reduce the risk of the trade, while in search of the 69760-exit target.
Small cash adjustment expected
While considering exits, traders will want to note that the South Africa 40 Cash Index is expected to adjust for a dividend in the underlying, currently expected to be around 16 points. The adjustment will take place late Tuesday afternoon (29th August 2023).
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