South Africa 40 Cash Index reversal highlighted and cash adjustment reminder
Traders of the South Africa 40 Cash index will note that there is a 5.1-point cash adjustment expected today on the index
The South Africa 40 Cash Index has now given us some more meaningful indications of a short to medium term trend reversal from down to up. This is evidenced by the 20-day simple moving average (red) crossing above the 50-day simple moving average (green), marked with the red arrow, as well as the price having now broken above trend line resistance.
For new long entries into the index, we are looking for a break / close above the 63245 level, or a pullback to either the 61150 or 60750 level. Should the price instead pullback from overbought territory and close below the dotted trend line on our chart, our near-term long bias to trades would need to be reassessed.
Our preference is to find long entry on a pullback from overbought territory, although the upside breakout scenario would also be suitable for our long entry criteria, albeit with a lower level of conviction.
Should either of these scenarios manifest we will update our guidance accordingly with targets and failure / stop levels.
Markets are likely to remain volatile in the short term in lieu of the US elections currently underway.
Cash adjustment
Traders of the South Africa 40 Cash index will also note that there is a 5.1-point cash adjustment expected today (8 November) on the index (in lieu of dividends in the underlying).
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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