The South Africa 40 cash index broke the 45550 support level intraday, although failed to confirm a downside breakout with a close below this level. The price has since reversed and is trading mid-range between horizontal levels 45550 and 46700. The move down from the highs has taken the form of a channel marked with the dotted black parallel lines.
While the price trades in the middle of both the channel and horizontal range, caution is preferred, awaiting a true directional move through a breakout. While underlying local financial markets are closed on Friday (and Monday) with U.S. jobs data scheduled for release, further caution is considered.
For an upside breakout we await a close above 46700 considering a move to retest the all-time high at 47410. Should horizontal support be broken at 45550 (confirmed with a close) channel support is considered at around 45000.