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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

South Africa 40 Cash Index: waiting for directional break

The SA40 Cash Index continues trade within a short term rangebound environment

Source: Bloomberg

South Africa 40 Cash Index

Source: IG Charts
Source: IG Charts

The South Africa 40 Cash Index has continued to trade within the short-term range highlighted in our previous note. The levels of which are considered between 71125 (support) and 72370 (resistance).

The long-term trend is also considered sideways as the index continues to whipsaw back and forth through the 200-day simple moving average (200MA) (blue line).

For a new directional commitment, we are waiting for a near term breakout.

For short entry, traders might prefer to see bearish confirmation with a close below the 71125-support level, before targeting a move back towards 69760 and 68500 levels respectively. In this scenario, a close above 72370 might be used as a stop loss indication for the trade.

For long entry, traders might prefer to see a close above the 72370-resistance level before targeting a move back towards the 74180 level. In this scenario, a close below the 71125 level might be used as a stop loss indication.

South Africa 40 Cash Index (Previous 18 July 2023)

Source: IG Charts
Source: IG Charts

The South Africa 40 Cash Index is currently finding resistance at the 72370 level whilst in overbought territory. The longer-term trend for the index is considered sideways at present.

Traders looking for short entry might prefer to see bearish confirmation with a close below the 71125-support level, accompanied by a move out of overbought territory, before targeting a move back towards 69760 and 68500 respectively. In this scenario, a close above 72370 might be used as a stop loss indication for the trade.

For long entry traders might prefer to see a close above the 72370-resistance level before targeting a move back towards the 74180 level. In this scenario, a close below the 71125 level might be used as a stop loss indication.

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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