The South Africa 40 cash index reached a high of 47540, falling marginally short of the 47700 upside target, before forming a bearish engulfing candle pattern (circled blue). The gap down to follow (between levels 46860 & 46550) highlights the enthusiasm of short-term selling amidst the macro uncertainty pertaining to a possible “Grexit”.
The guided trailing stop level at 46350 has now triggered as the price closed below the level. The most recent candle resembles a spinning top which is a confirmation of price uncertainty.
For renewed faith in further upside, the price would need to close above gap resistance at 46860 in which circumstance a retest of the recent high at 47540 is favoured. For further downside we await a close below the previous day’s low at 45970, in which case the initial support target at 45375 is considered.
Click here to view South Africa 40 chart