South Africa 40 cash index: bearish break below key support levels
The South Africa 40 Cash Index breaks below key support and its 200-day MA, hinting at trend reversal. A rebound from oversold levels prompts caution, especially with today’s expected 357.5-point dividend adjustment.
South Africa 40 Cash Index
The correction on the South Africa 40 Cash Index has now taken the price through all of our labelled support levels from our previous note.
The long-term trend is no longer considered up with the index price having aggressively broken below the 200-day simple moving average (blue line).
We are seeing a relatively quick rebound from oversold territory on the index.
For new short positions, traders might prefer to see a bearish price reversal before the 79340-resistance level. In this scenario, 73580 becomes the initial support target, while a close above the reversal high might be used as a stop loss consideration.
Should the price instead move to close above the 79340 level before a bearish price reversal is formed, the short considerations would become null and void.
Periods of high volatility in markets (as is current) do require additional caution. One such approach maybe to trade smaller positions with wider stop loss considerations.
Large cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of 357.5 points on Tuesday the 8th of April 2025.
South Africa 40 Cash Index (previous)
The South Africa 40 Cash Index has come crashing down as the local budget and in turn Government of National Unity (GNU) stability concerns meet the reciprocal tariff announcements from US president Donald Trump.
In turn our long trade assumptions have failed with the index trading below the guided stop level in from our previous note.
The long-term trend is still considered up despite the short-term price correction underway. For now, we wait to see how far the current correction takes us before looking for new trade considerations.
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