Technical Tuesday

7 April 2015

Our weekly technical report is compiled by in-house market analyst Shaun Murison

In the report this week we look at the South Africa 40 index, key indicators as well as the following equities:

Harmony Gold Mining Co Ltd

Shoprite Holdings Ltd

Spot Gold

South Africa 40 index

Technical view

The South Africa 40 cash index has respected the guided support level at 45550 as it once again tested the level, before rebounding towards the range trading target of 46700. Breakout traders will be looking for a close above 46700 for a move to retest the recent high at 47410.

The price does however remain in a broader consolidation between horizontal levels 45550 and 47410. These levels will be monitored going forward for clues relating to the continuation or reversal of the preceding uptrend.

 

Source: ProRealTime charts, as of 07/04/2015

Commodity in focus

Spot Gold (SA)

The price of Spot Gold has formed an inverse head and shoulders formation (marked L, H & R). The pattern suggests a reversal of the preceding downtrend.

The height of the pattern projected from the breakout level (dotted vertical lines) suggests a proportionate upside target at $1275/oz. A price close below the left shoulder at $1177/oz. would consider the failure of the bullish formation. 

Source: ProRealTime charts, as of  07/04/2015

Equities in focus

Harmony Gold Mining Co Ltd

The price of Harmony is forming (not yet completed) a double bottom formation (blue “W”). The pattern warns of the preceding downtrend reversing into a near-term uptrend.

For the pattern to complete, the price would need to close above resistance at 2370. Should this occur, the height of the pattern projected from the breakout level arrives at an upside target of 2800, while a close below trend line support at 2175 would consider the failure of the bullish indication.

Source: ProRealTime charts, as of  07/04/2015

Shoprite Holdings Ltd

The price of Shoprite is forming (not yet completed) a double bottom formation (blue “W”). The pattern warns of the preceding downtrend reversing into a near-term uptrend.

For the pattern to complete, the price would need to close above resistance at 16550. Should this occur, the height of the pattern projected from the breakout level arrives at an upside target of 17725, while a close below trend line support at 15750 would consider the failure of the bullish indication. 

Source: ProRealTime charts, as of  07/04/2015

Market overview

A Technical Analysis overview of key indicators and sectors with regards to trend, volatility and overbought/oversold conditions.

Click to view this week's market overview

 

 

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