The South Africa 40 cash index confirmed a breakout of the 46700 resistance and proceeded to trade toward the previous high resistance target at 47410. The price is finding resistance at the same time that the Stochastic has moved firmly into overbought territory.
The trend bias is however up and should a retrace occur from this level, long entry would be considered at 46700. A failure level from this entry would be a close below the dotted trend line support on our chart at 46400, as in this circumstance a retest of the 45550 level would be considered.
Should a price close above 47410 occur, a breakout is considered in line with the trend (which holds more relevance than the Stochastic’s overbought indication). In this situation a move towards trend line resistance at 48345 is favoured.