South Africa 40 Cash Index rebounds above key resistance level
The South African benchmark index has rebounded sharply setting sights on record territory. However, whipsawing around the 200-day moving average suggests caution in this volatile market environment.
South Africa 40 Cash Index
The rebound on the South Africa 40 Cash Index has taken the price back above the 79340-resistance level. The move above the 79340 level suggests the all-time high at 83420 to be the next resistance target.
The price whipsaw through the 200-day simple moving average (200MA) (blue line) suggests that we are in a broad range bound trading environment rather than in a committed up or downtrend right now. As such, traders will look for reversals or breaks of levels for new opportunities in either direction.
When a new trade setup presents itself, we will update guidance according with targets and failure levels.
Small cash adjustment expected
The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying of 36 points on Tuesday the 14th of April 2025.
South Africa 40 Cash Index (previous)
The correction on the South Africa 40 Cash Index has now taken the price through all 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.
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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