South Africa 40 Cash Index reversal and dividend reminder
A close above trend line resistance and the 66450 level (should it occur) might provide bullish confirmation for long entry
South Africa 40 Cash Index
The intraday reversal from our previous note (below) failed to confirm and instead we saw the downside break scenario manifesting. The price has since found support at the 65100 target and formed a bullish price reversal (circled green) off this level and from oversold territory.
For new long positions, traders might prefer to see some further momentum from the reversal. A close above trend line resistance and the 66450 level (should it occur) might provide bullish confirmation for long entry. In this scenario, 67580 becomes the initial upside resistance target from the move, while a close below 65650 might be used as a stop loss consideration for the trade.
Cash adjustment expected
Traders will note that the South Africa 40 Cash Index is expected to adjust for a dividend in the underlying this week (Tuesday 9 October) currently estimated at 136.3 points.
Key data to watch
Date |
Time |
Region |
Event |
Previous |
|---|---|---|---|---|
11 October 2023 |
2:30pm |
USD |
Core PPI m/m |
0.20% |
11 October 2023 |
2:30pm |
USD |
PPI m/m |
0.70% |
11 October 2023 |
8:00pm |
USD |
FOMC Meeting Minutes |
|
12 October 2023 |
8:00am |
GBP |
GDP m/m |
-0.50% |
12 October 2023 |
11:30am |
ZAR |
Mining production and sales, August |
-3.60% |
12 October 2023 |
1:00pm |
ZAR |
Manufacturing production and sales, August |
2.30% |
12 October 2023 |
2:30pm |
USD |
Core CPI m/m |
0.30% |
12 October 2023 |
2:30pm |
USD |
CPI m/m |
0.60% |
12 October 2023 |
2:30pm |
USD |
CPI y/y |
3.70% |
12 October 2023 |
2:30pm |
USD |
Unemployment Claims |
207000 |
13 October 2023 |
3:30am |
CNY |
CPI y/y |
0.10% |
13 October 2023 |
10:00am |
GBP |
BOE Gov Bailey Speaks |
|
13 October 2023 |
4:00pm |
USD |
Prelim UoM Consumer Sentiment |
67.7 |
14 October 2023 |
5:00pm |
GBP |
BOE Gov Bailey Speaks |
|
South Africa 40 Cash Index (previous)
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.
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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