The channel resistance has served the South Africa 40 cash index well in terms of providing upside targets as well as resistance.
This week the index is retracing off channel resistance rather than consolidating as in previous weeks. This is noted by the last two days of price activity making lower highs and lower lows. The pullback has not yet indicated completion and a confluence of horizontal and channel support at 45500 is favoured in the absence of a bullish price reversal.
The short-term weakness is however not a signal of a trend reversal at this stage and trend followers would look to accumulate off support rather than trade against the longer term uptrend which still prevails. Should the price start trading below the 45500 support level, only then would the near-term uptrend be reviewed for a possible reversal.