Technical Tuesday
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The outlook for the South Africa 40 Cash Index, Gold, Oil and the Rand
Breakout, trend following and pair trading opportunities on local and international shares
Entry levels, target prices and failure levels
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Contact us: 010 500 8624
Call 010 500 8624 or email newaccounts.za@ig.com to talk about opening a trading account. We're around 24 hours a day from 9am Saturday to 11pm Friday.
Contact us: 010 500 8624
20 May 2025
In the report this week, we look at the following markets:
- South Africa 40 Cash Index
- USD/ZAR
- Spot Gold
- Brent Crude Oil
- Dischem Pharmacies vs The Clicks Group
South Africa 40 Cash Index
The South Africa 40 Cash Index bullish price reversal around the 84030-support level highlighted in our previous note has yielded marginal gains so far.
Overhead resistance remains the upside target at 87400. Traders who are long might consider using a close below the low at 83400 as a stop loss indication.
No cash adjustment expected
The South Africa 40 Cash Index is not expected to adjust for a dividend in the underlying this week.
USD/ZAR
The USD/ZAR has retraced back to the 18.00 support level after realising the 18.45 resistance target from our previous note.
The price is now testing support at 18.00. A close below this level would suggest 17.60 to be a further downside target. Should the 18.00 level not break and instead we see another rebound off this level 18.45 becomes the initial resistance target.
Should either scenario present itself we will update guidance accordingly with targets and failure levels.
Spot Gold
The price of gold has pulled back further and is attempting to rebound off the 3170 support level. A positive close above the 3240 level would suggest the 3380 level to be the next resistance target from the move. In this scenario, a close below the 3170 level might be used as a stop loss consideration.
Brent Crude Oil (Weekly)
The price of brent crude is once again rebounding off the 59.80 support level, although the long term downtrend remains firmly in place.
Traders might consider waiting for the rebound to end before reinitiating short positions, that is provided that the rebound fails before breaking the downward trendline or 75.45 resistance level.
Dischem Pharmacies vs The Clicks Group
The pair considers a Long Dischem position against a Short Clicks position. The net result of these combined trades looks for an 11% profit margin. A stop loss is considered of equal proportion to the expected gain.
A successful pair trade can be realized 1 of 3 ways:
1. The long position rises while the short position falls
2. The long position rises faster than the short position rises
3. The short position falls faster than the long position falls.
The blue line on the chart represents the Dischem / Clicks ratio which recently traded more than 2 standard deviations below the mean (middle line). A successful trade would require the ratio (blue line) to return to the mean to meet the guided profit target.
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For the full report, which adds trade opportunities on local and international shares, click the link below
Get full report
For the full report, which adds trade opportunities on local and international shares, click the link below
Shaun Murison
Our weekly technical report is compiled by in-house senior market analyst, Shaun Murison.
Shaun has worked in financial markets for over ten years. As market analyst, he presents our CFD trading seminars around the country. In addition, Shaun is a regular commentator on the local financial markets, contributing to various media (such as CNBC Africa and Business Day) and writing daily and weekly market reports. He is a registered person at the JSE as well as a Certified Financial Technician (CFTE). You can follow Shaun on Twitter at @ShaunMurison_IG for regular market updates and insight.
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