SA40 Cash Index

  • The index moved very close towards our failure level at 47000 but has not yet closed below the level
  • With this in mind, we are still favouring the upward trend and the targets set out on Tuesdays guidance (see below) although with a lot less conviction
  • The L, H and R on the chart below warns of a possible head and shoulders reversal pattern forming
  • A close below our stop level at 47000 would put the bearish head and shoulders pattern in play as well
  • This would support renewed downside
  • Should this situation occur we will update the call accordingly

SA40 CASH INDEX – 30 MAY (PREVIOUS)

  • Last week we noted that the long lower wicks on the candles, marked with blue arrows, suggested buying activity from the 47200 level, supporting the view that this area was an opportunity for long entry
  • The move off this level has realised our initial target at 48050 (not labelled on today’s chart) and now a move towards the next upside target at 48665 is favoured
  • A break of this level calls for a retest of the all-time high at 49300
  • The index is again in overbought territory, although this still remains a less relevant indication than the firm upward trend in place
  • The overbought signal is therefore not considered an indication to trade against this uptrend, although does support the idea of tightening the stop loss level as the trend becomes more mature
  • The dotted trend line is now used for this purpose
  • Should the index close below this dotted trend line short term trend followers might consider exiting long positions and maintain a neutral positioning until the next opportunity presents itself

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.