South Africa 40 Cash Index waiting on the next directional cue
After failing to reach the high at 65600, the price of the South Africa 40 Cash Index has traded through our trailed stop level as it undergoes a short term correction from its recent rally. Traders who were long into the previous rally would have also received a cash adjustment in lieu of a dividend in the underlying of around 245 points.
The short term correction looks to have stalled temporarily at the low of 62030 as the index nears oversold territory.
For a downside continuation of the correction, a close below 62030 would suggest a move towards the next support target of 61050.
For renewed gains, we are looking for a close above 63200 to target a move back towards the 63900 and 64750 levels respectively.
Our preference right now is to wait for the break in either direction before opening new positions on the index.
Should either scenario manifest we will update our guidance with revised targets and stop loss suggestions.
Cash adjustment
Traders of the South Africa 40 Cash index will want to note that the index is set to adjust (on Tuesday the 23rd of August) for a dividend in the underlying, currently estimated at 38.6 points.
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