Technical Tuesday

9 June 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:

Mondi Ltd

Aspen Pharmacare Holdings Ltd

MMI Holdings Ltd

South Africa 40 index

Technical view

The South Africa 40 cash index has reversed off support (also downside breakout level) at 45350 and formed a bullish engulfing candle pattern. The price has also broken the downward trend line before coming back to retest the level. The stochastic has now also crossed out of oversold territory.

These indications are short-term bullish and a rebound is favoured in the short-term. Traders might consider the tentative resistance target at around 46500 followed by 46900. A close below 45350 would consider the failure thereof and a downside breakout would be assumed. Should the downside breakout occur, the next level of support is considered at 44450.

Source: ProRealTime charts, as of 09/06/2015

Equities in focus

Mondi Ltd

The price of Mondi Ltd has now experienced its first pullback from an all-time high providing a possible swing trading opportunity. The share price is showing a positive divergence with the stochastic oscillator, which is also starting to move out of oversold territory.

These indications are short-term bullish and a retest of the recent high at 28375 is favoured. A close below gap support at 24600 would consider the bullish indications to have failed.

Source: ProRealTime charts, as of 09/06/2015

Aspen Pharmacare Holdings Ltd

Aspen looks to have ended the short-term downswing, as alluded to by the bullish engulfing candle pattern (circled blue) and the price trading back above the dotted trend line.

The Stochastic has crossed out of oversold territory supporting the price action. A move to retest resistance at 38990 is favoured, while a close below support at 34340 would consider the failure of the bullish indications.

Source: ProRealTime charts, as of  09/06/2015

MMI Holdings Ltd

MMI Holdings has corrected to horizontal support and looks to be reversing off this level at present. The stochastic oscillator is moving out of oversold territory supporting the bullish price reversal.

A rebound towards resistance (previous support) at 3150 is favoured, while a close below support at 2860 would consider the failure of the bullish indications.

Source: ProRealTime charts, as of  09/06/2015

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

 

 

IG provides an execution-only service. The material on this website does not contain (and should not be construed as containing) investment advice or an investment recommendation, or 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 the above information. Consequently any person acting on it does so entirely at his or her own risk. The research 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. This communication must not be reproduced or further distributed. The price levels provided are derived from ProRealtime Charts (IT-Finance)

Open an account now

It's free to open an account, takes less than five minutes, and there's no obligation to fund or trade.

You might be interested in...

  • Execution and pricing

    Get fast, reliable execution and the best available prices.

  • Our charges

    We're clear about our charges, so you always know what fees you will incur.

  • Learn about IG

    See how we've been changing the face of trading for more than 40 years.

Contact us

24 hours a day from 10am Saturday to Friday night at midnight.

010 344 0053

You can also email helpdesk.za@ig.com