Technical Tuesday

Receive expert weekly trading analysis covering:

The outlook for the South Africa 40 Cash Index, Gold, Oil and the Rand

Breakout, trend following and pair trading opportunities on local and international shares

Entry levels, target prices and failure levels

Call 010 500 8624 or email newaccounts.za@ig.com to talk about opening a trading account. We're here 24 hours a day from 9am Saturday to 11pm Friday.

7 May 2024

In the report this week, we look at the following markets:

South Africa 40 Cash Index
USD/ZAR
Spot Gold
Brent Crude Oil
The BHP Group

South Africa 40 Cash Index

Technically we have now seen a break (close) above range resistance at 70850, however the small-bodied candle (6 May), with a long upper wick, suggests a weak conviction to the move. This low conviction breakout suggestion is furthered by today’s candle, which is drifting back below the 70850 level.

A bearish price reversal would confirm if the close of today’s candle is lower than the low of the preceding candle. In this scenario, 69700 becomes the initial downside support target, while a close above the previous high at 71370 might be used as a stop loss indication.

Should the bearish price reversal fail to confirm, and instead we see a strong move higher in coming days, traders might then prefer to wait for the first pullback from this move for long entry.

Should this scenario instead manifest, we will update guidance accordingly with targets and failure levels.

Cash adjustment expected

The South Africa 40 Cash Index is expected to adjust for a dividend in the underlying. The adjustment is currently estimated at 54 points and set for the 7th of May 2024.

Source: IG charts

USD/ZAR

The USD/ZAR has continued to decline, breaking below the 18.60 support level, before proceeding to move towards the next level of support at 18.30.

The black arrows below the price highlight candles with long lower wicks. These candles do suggest that the price is finding some support around current levels, whilst in oversold territory.

For confirmation of a bullish price reversal, traders might prefer to see a price close above the 18.60 level, before targeting a move back towards resistance at 18.80. In this scenario, a close below the reversal low might be used as a stop loss consideration.

Source: IG charts

Spot Gold

The price of gold has formed a bullish price reversal off short term range support at 2290. The reversal suggests 2350 as the range resistance target from the move, while a close below 2290 would suggest the bullish price reversal to have failed.

Source: IG charts

Brent Crude Oil

The price of brent crude remains in a long term consolidatory environment.

The price has now broken below the 84.20 and 83.50 support levels, although now trades well within oversold territory.

Provided that 84.30 remains unbroken resistance, 80.40 becomes the next downside support target from the move. A close above 84.20 might be used by traders as a failure indication for the move.

Traders instead looking to find long entry into brent, might prefer to either wait out weakness and hope for a bullish price reversal closer to the 80.40 support level, or alternatively look for a close above the 84.20 resistance level.

Source: IG charts

The BHP Group

The share price of the BHP Group remains in a broad sideways consolidation. The price has formed a bullish price reversal off support and from oversold territory.

Gap resistance at 55900 provides an initial upside resistance target from the move, while a close below the 51230-support level might be used as a failure indication for the setup.

Source: IG charts

Get full report

For the full report, which adds trade opportunities on local and international shares, click the link below

View PDF version

Get full report

For the full report, which adds trade opportunities on local and international shares, click the link below

View PDF version

Shaun Murison

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

Shaun has worked in financial markets for over ten years. As market analyst, he presents our CFD trading seminars around the country. In addition, Shaun is a regular commentator on the local financial markets, contributing to various media (such as CNBC Africa and Business Day) and writing daily and weekly market reports. He is a registered person at the JSE as well as a Certified Financial Technician (CFTE). You can follow Shaun on Twitter at @ShaunMurison_IG for regular market updates and insight.

Latest news

Beat the street: Fed speeches; consumer morale; oil set for a weekly gain; Dow eyes 40,000

Angeline Ong, 2024-05-10T14:22:22+0100
EUR/GBP drops, GBP/USD rises on June rate cut hopes while EUR/JPY

Axel Rudolph, 2024-05-10T13:21:08+0100
Trading volatility: EURUSD around US CPI

Jeremy Naylor, 2024-05-10T11:05:00+0100
EUR/GBP, GBP/USD hold steady ahead of BoE meeting while USD/JPY rises further still

Axel Rudolph, 2024-05-09T08:51:00+0100

IG provides an execution-only service. This material 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. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Contact us

Interested in opening an account?

Contact 010 500 8624 or

newaccounts.za@ig.com

Want to check on your application's progress? Email

newaccounts.za@ig.com

Clients: Help and support

WhatsApp: Click here

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Clients can lose more than they deposit. All trading involves risk.

IG is a trading name of IG Markets Limited and IG Markets South Africa Limited. IG Markets South Africa Limited offers domestic accounts and IG Markets Limited offers international accounts.

IG Markets South Africa Limited is authorised and regulated by the Financial Sector Conduct Authority (in South Africa) as an over-the-counter derivative provider and an authorised financial services provider (FSP No 41393). IG Markets Limited is authorised and regulated by the Financial Conduct Authority (in the UK).

IG provides execution only services and enters into principal-to-principal transactions with its clients on IG’s prices. Such trades are not on exchange. Whilst IG Markets South Africa Limited is a regulated FSP and acts as an intermediary as understood in the FAIS Act in relation to the international accounts offered by IG Markets Limited, CFDs issued by IG are not regulated by the FAIS Act as they are undertaken on a principal-to-principal basis. CFDs issued by IG Markets South Africa Limited are regulated by the Financial Markets Act, and IG Markets South Africa Limited is a licenced over-the-counter derivative provider.

South African residents are required to obtain the necessary tax clearance certificates in order to utilise their foreign investment allowance should the South African resident wish to open an international account with IG Markets Limited.

The information on this site is not directed at residents of the United States or Belgium or any particular country outside South Africa and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Voted SA’s top CFD provider in Business Day Investors Monthly Annual Stockbroker Awards in 2012, best platform for Active Day Traders in 2013 and 2014, SA's best Online Broker in 2015 and 2017 and SA's best CFD provider in 2020 as well as SA's Top CFD Broker in 2021.

IG Group | Careers | Marketing partnership