South Africa 40 Cash Index price setups and dividend reminder
Traders will also take note of high impact data scheduled this week which could have a material effect on global index movements
South Africa 40 Cash Index
After reaching the lower support target (67400) suggested by the bearish flag and reversal off resistance, the South Africa 40 Cash Index has rebounded from oversold territory to find resistance on the 68500 level.
Short setup considerations
At the time of writing the price is now reversing off the 68500 level. A bearish reversal would be confirmed should today’s (12 September 2023) price close below the halfway mark of the preceding green candle. In this scenario 67400 becomes the initial support target while traders might use a close above 68500 as a stop loss indication.
Long setup considerations
Traders looking for long entry, might instead hope to see a close above the 68500-resistance level before targeting a move towards the 69760-resistance level. In this scenario, a close below the 68000 level might be used as a stop loss consideration for the trade.
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 330.8 points. The adjustment will take place late Tuesday afternoon (12 September 2023).
High impact data expected
Traders will also take note of high impact data scheduled this week which could have a material effect on global index movements, including the South Africa 40 Cash Index. Amongst these key data points are Wednesdays US CPI inflation data, as well as Thursday’s European Central Bank’s (ECB) rate decision.
South Africa 40 Cash Index (previous)
The bearish indications highlighted in our previous note (below) confirmed on Tuesday’s price close. The price has since conformed to the bearish assumptions, trading through the initial support target at 68500.
The price is currently trading below the 68500 level. Should the price close below this level, a downside breakout would be confirmed, placing the 67400 level as the next downside support target.
Traders who have been short from the reversal, might consider trailing their respective stops closer, from a close above the 69760 level, to a close above the 68500 level.
Traders not already short into the move, might prefer to wait for the break of support at 68500 to confirm, before entering new positions into the index. In this scenario, the same support target and stop indication as above may be used by traders.
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