South Africa 40 Cash Index price trying to form intraday reversal
JSE sector moves, company news and upcoming results / dividend outlook
South Africa 40 Cash Index
Since our previous note, the South Africa 40 Cash Index broke the 66450-support level before trading to the 65100-support target.
The price of the index has now started to rebound off this level (65100) and could be forming an intraday price reversal (hammer). The intraday reversal would confirm should the price manage to close closer to the high of the day rather than the low. The reversal would be further validated by a move out of oversold territory by the stochastic oscillator. In this scenario, 66450 (previous support) becomes the initial upside resistance target, while a close below 65100 might be used as a stop loss consideration.
In the event that the reversal fails to confirm, and instead we see the price closing below the 65100-support level, 63400 becomes the initial downside target from the move, while a close above 66450 might be considered as a stop loss indication for the short trade setup.
No cash adjustment expected
Traders will note that the South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index has now traded through the 67400-support target and is now testing the 66450-support level.
A close below 66450 would consider another downside breakout with 65100 a further support target considered from the move (should the breakout manifest). In this scenario, a close above 67400 might be used as a stop loss consideration.
While the index has moved into oversold territory, this signal alone does not yet provide a strong enough suggestion for a rebound. Traders who are however looking for long entry might prefer to wait for extra confirmation in the form of a price close above the 67400 level. In this scenario, 68500 would become the initial resistance target form the move, while a close below 66450 might be used as a stop loss consideration.
Large cash adjustment expected
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 143.6 points. The adjustment will take place late Tuesday afternoon (26 September 2023).
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