South Africa 40 Cash Index produces bearish price reversal at resistance
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 27.7 points on Tuesday the 1st of October 2024.
South Africa 40 Cash Index
The South Africa 40 Cash Index has traded through our short-term targets and reached the overhead trendline resistance level of 79800. Circled red we see a bearish price reversal has now formed while the price of the index is in overbought territory. The reversal suggests that traders who have been long into the move higher might look to exit their positions at current levels while waiting for a new opportunity to emerge.
Trend followers will once again consider waiting for short term weakness to play out and end with a bullish price reversal, preferably around one of the labelled support levels, before looking for long entry once again.
Should this scenario manifest, we will update guidance accordingly with targets and failure levels.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 27.7 points on Tuesday the 1st of October 2024.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index has managed to produce the close above 74420 (red arrow) and is now extending gains suggested from the oversold and divergence signals highlighted previously.
75830 provides the initial upside resistance target from the move, while traders might consider having a stop loss situated at a close below the two-day low.
The relatively tight stop loss considers key central bank meetings this week and their propensity to induce short term volatility.
Cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of around 29.4 points on Tuesday the 17th of September 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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