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South Africa 40 Cash Index price reversal off support

The South Africa 40 cash Index could be extending its longer-term uptrend after a bullish short term price reversal

Source: Bloomberg
Source: IG Charts
Source: IG Charts

The South Africa 40 Cash Index has now formed a bullish price reversal off the 69835-support level. The bullish reversal suggests that the short-term trend is now aligning with the longer-term uptrend. The longer-term uptrend is considered with the price trading above the 200-day simple moving average (200MA) (blue line).

The 73420 high marks the initial resistance target from the bullish reversal. Traders who are long might consider using a close below the black trend line on the chart as a trailing stop loss indication / failure level for the suggested move higher.

Cash Adjustment

The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week.

IG client sentiment

Source: IG
Source: IG

As of Tuesday the 30th of May 2023, the majority (56%) of IG clients with open positions on the South Africa 40 Cash Index expect the price to fall, while 44% of clients with open positions expect the price to rise.

Key macro data this week

Date Time Region Event Previous

30 May 2023

4:00pm

USD

CB Consumer Confidence

101.3

31 May 2023

All Day

EUR

German Prelim CPI m/m

0.40%

31 May 2023

4:00pm

USD

JOLTS Job Openings

9.59M

1 June 2023

2:15pm

USD

ADP Non-Farm Employment Change

296K

1 June 2023

2:30pm

USD

Unemployment Claims

229K

1 June 2023

4:00pm

USD

ISM Manufacturing PMI

47.1

2 June 2023

2:30pm

USD

Average Hourly Earnings m/m

0.50%

2 June 2023

2:30pm

USD

Non-Farm Employment Change

253K

2 June 2023

2:30pm

USD

Unemployment Rate

3.40%

In summary:

  • The South Africa 40 Cash Index has formed a bullish price reversal off support

  • The long-term trend for the index remains up

  • 73420 provides the initial upside resistance target

  • The long-term trend line might be used as a trailing stop loss / failure level for the suggested move higher

  • The majority of IG clients with open positions expect the South Africa 40 Cash Index to fall in the near term

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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