The South Africa 40 cash index has moved to and exceeded the trend line resistance target at 48500. The index remains in overbought territory, but as alluded to in previous weeks, this is less relevant than the strong uptrend which prevails.
However, traders that have been long for some time might consider the overbought signal a suggestion that profit taking could be a prudent option at current levels.
Swing traders and trend followers alike would be hoping for a retrace towards support at 47980, for an opportunity for long entry, targeting a retest of the recent high at 49298 with a trading stop loss considered should the price close below 47410 support.
The longer-term upside target, as projected from a weekly chart in previous weeks, remains at 49840.