As mentioned last week the South Africa 40 index has formed a large rising wedge formation, which warns of the potential for downside as the trend loses its momentum and starts to creep.
In the near-term, there is a trading range between levels 42800 and 43640. Short-term range traders would be looking to accumulate near the support and distribute near resistance, with a break above or below these levels as a signal to exit. Breakout traders would be waiting for a break of support or resistance as an opportunity to enter in the same direction as the breakout, with the height of the range (840 points) as a projected directional target.
The long term-trend remains up (price firmly above 200MA), although the price activity over the last 4 months (rising wedge) warns of a possible retracement. It is with this reason that long or short trades are considered relative to the breakout, and range trade opportunities alluded to above.