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The SA40 Cash Index has pulled back to our deeper retracement level as discussed in last week’s Technical Tuesday newsletter. At current levels the Stochastic is suggesting the index to be oversold at this support level. The longer term trend bias remains up and the pullback would afford another long entry for trend followers. From current levels 46800 becomes the initial upside target, which if broken further favours a move to the short term high at 47200. Should the price of the index instead move to close below horizontal support at 45000, the bullish setup would be deemed to have failed.
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