South Africa 40 Cash Index price testing stop, small dividend expected
The South Africa 40 cash Index has started to retrace from overbought territory.
The South Africa 40 Cash Index’s upside break of the 72370 level yielded some gains, although fell around 150 points short of the initial upside resistance target of 73420. The price is now testing the trailing stop suggestion at our dotted trend line. The index has also started to retrace from overbought territory.
Traders who were long might consider exiting their trades while waiting for the current retracement to play out.
The long-term trend for the index does however remain up with the price still trading firmly above the 200-day simple moving average (200MA) (blue line).
Our preference is to look for long entry on a bullish price reversal at one of the lower labelled support levels.
Should the current retracement instead pull the price below the 200MA, the longer-term uptrend would be broken and a broad sideways rangebound environment be considered.
Only on a move below the 66450-support level would we start to consider the longer-term trend to be down.
Cash Adjustment
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of 20.1 points on Tuesday the 20th of June 2023 (around market close).
IG client sentiment
As of the 20th of June 2023, most IG clients (56%) with open positions on the South Africa 40 Cash Index expect the price to fall in the near term, while 44% of IG clients with open positions expect the price to rise.
Top movers on the JSE this week so far
Top movers for the trading week thus far weighing on the index include precious resource counters Impala Platinum, Anglo American Plc, Gold Fields and AngloGold Ashanti.
JSE Top 40 counters trying to hold up the index as of the 20th of June 2023 are Growthpoint Properties, Remgro, Discovery, and Woolworths Holdings.
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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