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- Circled black we see that the SA40 Cash Index has produced another bearish reversal (dark cloud cover) before the 46500 level
- We had a similar reversal signal (marked red) fail recently, marked with the red arrow
- We hope that the current reversal signal carries more credence as it is supported by the stochastic crossing out of overbought territory
- These signals suggest the medium term downtrend is now being continued
- 44900 is the initial downside target favoured from the reversal signals
- Should the price instead move to close above 46500, the bearish indications would be deemed to have failed
- While the short term implications are bearish, a move to the initial downside target provides a relatively small reward relative to the risk associated with the 46500 stop level