Technical Tuesday
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The outlook for the South Africa 40 Cash Index, Gold, Oil and the Rand
Breakout, trend following and pair trading opportunities on local and international shares
Entry levels, target prices and failure levels
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Contact us: 010 500 8624
Call 010 500 8624 or email newaccounts.za@ig.com to talk about opening a trading account. We're here 24 hours a day from 9am Saturday to 11pm Friday.
Contact us: 010 500 8624
30 April 2024
In the report this week, we look at the following markets:
- South Africa 40 Cash Index
- USD/ZAR
- Spot Gold
- Brent Crude Oil
- The BHP Group
South Africa 40 Cash Index
The South Africa 40 Cash Index has produced multiple upside breakouts since our previous note. The move above 67940 saw the initial target at 68515 realised, before a break of this level has produced a move through to the 70850 level.
Range traders might be considering closing their long positions at current while waiting for a new opportunity to emerge.
For new long positions, traders might hope to see a break (close) above the 70850 level, followed by a pullback thereafter.
For new short positions, range traders might prefer to see a bearish price reversal off the 70850 resistance level, accompanied by a move out of overbought territory.
Should either of these scenarios manifest, we will update our 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 for the week commencing 29 April 2024. The adjustment is currently estimated at 18 points and set for the 30th of April 2024.
USD/ZAR
The USD/ZAR after testing range resistance at 19.40, formed an intraday price reversal (shooting start) followed by a bearish price reversal (circled red) from overbought territory.
The reversals have resulted in renewed downside with support at 18.80 being broken and now 18.60 being tested. The move lower has however also moved the USD/ZAR into oversold territory.
For long entry, traders might hope to see a bullish price reversal from current, supported by a move out of oversold territory. A close above 18.80 would suggest some momentum to the move, with 19.15 the initial upside resistance target. In this scenario, a close below the 18.60 level might be used as a stop loss indication.
Should the price instead move to close below the 18.60 support level, traders might prefer to wait out weakness in lieu of the oversold suggestion. In this scenario, a bullish price reversal closer to either the 18.30 or 18.15 support levels might provide new opportunity for long entry.
Spot Gold
The price of gold has moved into a short-term consolidation between levels 2290 and 2350. The longer-term trend for the precious yellow does however remain up, suggesting that traders keep a long bias to positions.
For long entry, traders might hope to see a bullish price reversal off range support at 2290, or a bullish break (close above) of the 2350 resistance level.
Should the price instead move to break below range support (2290), trend followers might prefer to wait out weakness and look for long entry on a bullish price reversal closer to the 2200 to 2225 support range.
Should on of these scenarios manifest, we will update guidance accordingly with targets and failure levels.
Brent Crude Oil
The price of brent crude remains in a long term consolidatory environment. The medium-term trend is up, and in the short term we have had a correction of that trend.
The price looks to be reversing off the 86.80 level from a brief pullback. Should todays candle close in positive territory, it could suggest a short-term range trade opportunity, with 88.90 the initial upside resistance target. In this scenario, a close below short-term range support at 86.80
The BHP Group
The share price of the BHP Group remains in a broad sideways consolidation. The price has formed an intraday price reversal off support and from oversold territory. For confirmation of the reversal, traders might prefer to see a higher close on today’s candle, accompanied by a move out of oversold territory.
Should the reversal confirm, gap resistance at 55900 provides an initial upside resistance target from the move, while a close below the 51230-support level might be used as a failure indication for the setup.
Get full report
For the full report, which adds trade opportunities on local and international shares, click the link below
Get full report
For the full report, which adds trade opportunities on local and international shares, click the link below
Shaun Murison
Our weekly technical report is compiled by in-house senior market analyst, Shaun Murison.
Shaun has worked in financial markets for over ten years. As market analyst, he presents our CFD trading seminars around the country. In addition, Shaun is a regular commentator on the local financial markets, contributing to various media (such as CNBC Africa and Business Day) and writing daily and weekly market reports. He is a registered person at the JSE as well as a Certified Financial Technician (CFTE). You can follow Shaun on Twitter at @ShaunMurison_IG for regular market updates and insight.
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