South Africa 40 cash index pulls back from new highs: strategic entry points ahead
As the SA40 index retreats from overbought territory and all-time highs, we identify key support levels for strategic long entries while maintaining an 87400 target for continued upside momentum
South Africa 40 Cash Index
The South Africa 40 Cash Index has started to pullback from new high and overbought territory.
Our preference remains that of looking for long entry into the first pullback from each new high. A pullback to one of the labelled support levels above the 78615 level might afford traders such an opportunity.
87400 provides a revised longer term upside target for the index. Aggressive traders who are already long from the break into new high territory might consider using a close below the 82670 support level as a stop loss indication.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying on Tuesday the 6th of May 2025.
South Africa 40 Cash Index (previous)
The bearish reversal off resistance highlighted in our previous note has failed with the price now having produced a break above the previous all-time high at 83420.
The price of the index has however muddled along sideways since producing the breakout, questioning the upward momentum as we continue to trade deep within overbought territory.
Nevertheless, our preference remains to find long entry into the first pullback from each new high. A pullback to one of the labelled support levels above the 78615 level might afford traders such an opportunity should a pullback occur.
Aggressive traders might however consider a move above the 84030 level as a show of momentum and a long entry opportunity as well.
Should either of these scenarios manifest we will update guidance accordingly with targets and failure levels.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying on Tuesday the 29th of April 2025.
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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